See if you qualify for Relevant Life Insurance and get a clear, free quote.

What is Relevant Life Insurance?

Relevant Life Insurance is a life policy taken out by a business on the life of an eligible employee. The business pays the premiums. The policy is designed to provide a death benefit to the beneficiaries determined through the qualifying policy and trust arrangement, rather than to protect the company itself.

It is often considered where a small business does not have enough employees for a registered group life scheme, where selected employees need individual cover, or where an employer wants to provide an additional benefit. Whether it is appropriate depends on the facts and the available policy.

Who might consider it?

Relevant Life Insurance may be worth discussing if:

• You run a limited company and want the business to fund life cover for an eligible working director or employee.
• Your business is too small for, or does not want to establish, a registered group life scheme.
• You want to consider individual employer-funded cover for selected employees.
• You already have personal life cover but want to review whether an employer-funded arrangement could meet a separate need.

This list is illustrative. It does not establish that a person or business is eligible or that the policy will be tax-efficient in their circumstances.

How it generally works

1. 01

   The business applies

   The employer is normally the policyholder and pays the premium.

2. 02

   An eligible employee is insured

   The life assured must meet the insurer's criteria and the statutory conditions relevant to the policy.

3. 03

   Underwriting takes place

   The insurer assesses the application and may accept it on standard terms, offer different terms, postpone or decline it.

4. 04

   A qualifying trust structure is used where applicable

   The arrangement is commonly written under an appropriate trust, with beneficiaries and trustees governed by the policy and trust documentation.

5. 05

   A valid claim is assessed

   Benefits are payable only where the insured event and all applicable policy conditions are met.

What it is designed to provide

• A life insurance benefit for an eligible employee, subject to the policy terms.
• Premiums funded by the employer rather than paid personally by the employee.
• An individual arrangement where a full group scheme may not be suitable.
• A potential tax treatment that can differ from an equivalent personal arrangement, depending on the facts.

What it is not

• It is not Key Person Insurance and is not designed to pay a benefit to the business for its own financial loss.
• It is not a savings or investment product and normally has no cash-in or surrender value.
• It does not guarantee a corporation-tax deduction, exemption from benefit-in-kind rules or a tax-free outcome.
• It does not remove the need to keep the policy and trust arrangement within the qualifying conditions.
• It does not guarantee that an application will be accepted or that a future claim will be paid.

Cover, term and underwriting

The available cover amount and policy term depend on the insurer's product rules, financial justification, the employee's age and circumstances, and underwriting. Relevant Life policies are designed around statutory conditions, including limits connected with age, benefits, surrender value, beneficiaries and purpose. The insurer's current policy documents govern.

Premiums may be guaranteed for the selected term or reviewable, depending on the product. We will explain the applicable basis before an application is made.

Tax information

The tax treatment of Relevant Life Insurance depends on the policy structure and the circumstances of the employer and employee. Tax law and HMRC practice can change.

Eligibility for corporation-tax deductions, benefit-in-kind treatment and the taxation of policy benefits should not be assumed from this page. Your accountant or tax adviser should confirm the treatment for your business.

Trusts and beneficiaries

Relevant Life policies are commonly established with a trust intended to direct eligible benefits to the appropriate beneficiaries. The trust must be completed and administered correctly, and actions taken by trustees can affect how the arrangement operates.

Everlife's insurance service does not automatically include legal or tax advice. If the ownership, trust or beneficiary position is complex, separate professional advice may be needed.

How Everlife helps

We begin with the employer's objective, the proposed employee, existing cover and the intended benefit. We explain the available product scope, material conditions and costs. If we make a recommendation, it will follow an assessment of the customer's demands and needs and will explain why the proposed contract is suitable.