Relevant life cover is a tax-free efficient life insurance policy set up and paid for by a company but pays out to a staff member’s or director’s beneficiaries on death or in the event that they are diagnosed with a terminal illness.
Relevant life cover is tax deductible and not classed as a P11D benefit-in-kind by HMRC. Employees covered by it also don’t have to pay income tax on the premiums. Both the business and employee don’t have to pay National Insurance contributions either.
To qualify for Relevant Life Plan status there are certain requirements the plan must meet. It must provide only life cover. No disability or critical illness benefits are allowed. The term cannot exceed the 75th birthday of the employee.
Relevant life plans allow a company owner or director to still be able to cover themselves using their business rather than their own personal income, as well as providing the perk for employees.
