Retirement Planning and Wealth Management

Relevant Life Insurance

Relevant Life Insurance is a life insurance policy available to employers which provides an individual death-in-service benefit for an employee. It can help smaller businesses attract and retain high calibre staff by offering them an attractive benefit package that is also tax-efficient. It can also be a tax-efficient way for shareholder directors to take out life insurance.

There can be tax benefits for both the employer and employee from a Relevant Life Insurance policy.

Employer benefits:

  • corporation tax relief (so long as the premiums are wholly and exclusively for the purposes of the business); and
  • no National Insurance contributions to pay on the policy payments paid to fund the Relevant Life Insurance policy.

Employee benefits:

  • no National Insurance contributions to pay on the policy payments paid to fund the Relevant Life Insurance policy;
  • the policy payments won’t be taxed as a benefit in kind; and
  • policy payments and benefits don’t count towards pension Annual Allowance or Lump Sum and Death Benefit Allowance.