Relevant Life Insurance is a tax efficient way of providing life cover for employees and directors as a form of death in service benefit. It's ideal for businesses who cannot access group life schemes or for high earners who want to maximise their cover, beyond what a typical group plan offers. Monthly premiums are usually treated as a tax-deductible business expense.
Also known as Ownership Protection Insurance, this product provides the necessary funds to allow surviving shareholders or partners to exchange the shares of the deceased or critically ill owner for cash. The sudden loss of a key shareholder or owner can cause disruption to the business, both logistically and financially. Provided the arrangement is set up correctly, the proceeds are usually tax free.
Key person insurance protects businesses against the potential financial impact or loss of profit due to the death or serious illness of key individuals employed in the business. Capital is paid directly to the business and this can be used to cover the cost of any losses, replacement staff, or even debts.
Monthly premiums may be tax deductible, but only if the arrangement satisfies specific criteria.
Executive Income Protection pays a monthly income to the business if the insured employee or director cannot work due to ill health.
The income can cover up to 80% of remuneration and can include employer national insurance and pension contributions. Payments can be provided for up to two years (short term cover) or full cover can be arranged until the insureds selected retirement age. Monthly premiums can usually be treated as a tax deductible business expense for most employees.