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  • Gary Lumb

Relevant Life Insurance Policies - are you missing out on thousands?



Overview


Effectively a one man death in service scheme, a Relevant Life Insurance Policy can offer you the same benefits that you already have, but at a fraction of the net cost. Let's start by looking at an example.


Case Study


Let's look at George.


George is a Company Director of Muffins Ltd and currently pays £50 per month for his life cover. He had taken the policy out to run alongside his mortgage which runs for 20 years.


Below summarises the payment how it currently is and how it would look as a Relevant Life Policy, the key thing to consider is how much money the business needs to generate to take £50 (net) out of the business.


















In this example, George saves £12,225 over a 20 years and his policy is 56% cheaper, or £611.25 per month.


Who might want a Relevant Life Policy?


  • Small businesses wanting to offer life insurance to either themselves, or key people but have less than the required number to take out a Death in Service scheme.

  • High-earning employees who may exceed their personal pension lifetime allowance. Registered group life schemes are included in pension legislation, meaning any proceeds are added to the employee’s pension funds and may cause them to exceed their maximum lifetime allowance.

  • Members of group life schemes who want to top up their benefits. Some group life schemes are very restrictive. Relevant Life Cover can be used to provide an additional benefit in a tax-efficient way.

Summary


These plans are perfect for business owners and the self-employed because they are;

  • Owned by the company, but payable to your chosen beneficiary

  • Corporation Tax deductible

  • Not counted as a P11D Benefit

  • The benefit is paid tax free and isn't liable for Inheritance tax.


Relevant Life Policies are specialist products and you should seek Independent Financial Adviser before switching or setting up new policies.


Why not contact us for a chat on how we might be able to help.




Yorkshire Rose Financial Planning Ltd is an appointed representative of Sense Network Ltd which is authorised and regulated by the Financial Conduct Authority. Yorkshire Rose Financial Planning Ltd is entered on the FS Register (www.register.fca.org.uk) under reference 778188 and registered with Companies House England and Wales No. 10708121.

Registered Office: Parkhill Business Centre, Walton Road, Wetherby, LS22 5DZ

 

The information contained within this website is subject to the UK regulatory regime and therefore targeted at consumers based within the UK. The Financial Conduct Authority does not regulate Tax Advice or Workplace Pensions

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

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