If your client stops paying their premiums, the related cover may end. After the plan has been issued, your clients won’t be able to change it. We won’t pay a claim if the person covered dies as a result of intentionally taking their own life within the first 12 months of the policy starting. Businesses are too small for a group life scheme. Relevant Life Cover is a tax-efficient life insurance policy, allowing companies to offer a death-in-service benefit to its employees. The relevant life taxation rules are set up by the company and will pay a tax-free, lump sum on the death of the person insured. The proceeds go directly to the employee’s family or financial dependants.
The premiums are paid monthly and are guaranteed premiums. Benefits are usually free from inheritance tax. The maximum amount of cover available is up to £10million. There is no cash value at any time. You can also opt to put your life insurance in Trust so you have peace of mind that the payout will go to the people you intend. Many employers choose to provide their employees with a benefits package as a matter of course by the relevant life taxation rules. This provides a valuable incentive for prospective staff and helps keep current employees healthy and happy.
Death in service benefit is a popular addition to an employer’s benefits package and in its simplest form, guarantees a lump sum pay-out to a nominated beneficiary if an employee dies while working for their company. Life insurance is a similar product that can be taken out solely by a private individual, provided by an employer as part of a group package that covers all staff or via a combination that sees funding shared by both the employer and staff members.
If you change jobs or even retire, your life insurance will continue either until you die or your policy comes to an end. Depending on which package you or your employer opts for there can be a great deal of flexibility in the level of cover, as well as how long the cover will last and any extra cover, such as critical illness or the ability to waive your premium. The main difference between the two packages is how the cover is provided and maintained. As death in service, the benefit is enacted by your employer, to be eligible for a claim, you have to be on the company’s payroll when you die.