Small Business Employee Benefits
Provide competitive death-in-service benefits when you don't have enough employees for group schemes. Shows you care about employee welfare without massive administrative burden.
Relevant Life Plan
A Relevant Life Plan is company-paid life insurance that provides tax-efficient death-in-service benefits for your employees. It's ideal for smaller businesses or high earners who want cover without affecting pension allowances.
The plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
The policy may not cover all definitions of a critical illness. For definitions of illnesses covered please refer to the Policy Documents.
Relevant life plan insurance
Tax-efficient life cover for employees and directors. Most businesses want to offer competitive employee benefits but don't qualify for group schemes or worry about tax implications. A Relevant Life Plan provides individual death-in-service cover paid by your company, with significant tax advantages for both employer and employee.
Types of relevant life plan arrangements available
- Individual cover for specific employees or directors chosen by the employer
- Level cover where the payout stays the same throughout the policy term
- Decreasing cover where the payout reduces over time to match business loans
- Terminal illness benefit paying out if life expectancy is less than 12 months
- Discretionary trust arrangement ensuring tax-efficient payout to beneficiaries
- Flexible sum assured up to 15 times annual remuneration including bonuses and dividends
Most policies include terminal illness cover, paying out if the employee is diagnosed with a condition giving life expectancy of less than 12 months, providing funds when families need support most.
All policies must be written in discretionary trust from the start. This ensures benefits are paid tax-efficiently to the employee's family without forming part of their estate for inheritance tax purposes.
Each policy covers one specific employee or director. Your business chooses who to cover and pays the premiums directly. Unlike group schemes, you don't need minimum numbers or cover everyone.
Premiums are usually allowable business expenses while employees don't pay income tax or National Insurance on the benefit. Benefits don't count towards pension allowances, making this ideal for high earners.
Common reasons for Relevant Life Plans
Tax-Efficient Remuneration
Use Relevant Life Plans as part of tax-efficient reward packages. Premiums are business expenses while employees receive valuable benefits without personal tax liability.
High Earner Protection
Ideal for directors and high earners who want additional life cover without affecting their pension allowances. Particularly valuable since lifetime allowance changes in April 2024.
Family Security for Key People
Ensure your most important employees have adequate life cover for their families. Demonstrates commitment to their welfare and can help with recruitment and retention.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Trusts are not regulated by the Financial Conduct Authority.
How we help
We understand that financial decisions feel heavy because they affect everything that matters to you. Our job is to make them lighter, clearer and easier.
Testimonials
Trusted by businesses who value their people
We've helped businesses provide valuable employee benefits while maximizing tax efficiency.
How can we help with employee benefits?
Ready to provide valuable cover?
We'll help you set up tax-efficient life cover that benefits both your business and employees.