Relevant Life InsuranceWhat is Relevant Life Insurance?Relevant life insurance policies are a tax-efficient alternative or top-up to standard life insurance. These policies can provide a ‘death-in-service’ benefit and allow for businesses to provide families with a tax-free lump sum in the event of an employee’s and directors death or diagnosis of terminal illness. Relevant life insurance policies can save you nearly 50% in tax when compared to a standard life insurance policy and can provide many additional benefits.FACT: Relevant Life Insurance is not classed as a benefit in kind so employees don’t have to pay Income Tax or National Insurance on the premiumsWho can benefit from a Relevant Life Insurance Policy?Relevant Life Insurance policies are a very valuable and efficient way for any smaller employer to provide ‘death-in-service’ benefit without the need to set-up a group scheme. The flexibility of these policies can also be extended to specific key employees or high earners who may exceed the lifetime pension allowance. Premiums payed by an employer are often treated as allowable business expenses by HMRC and policies can also be used as an additional top-up to an existing group life scheme.FACT: Most Relevant Life Insurance policies can be transferred between employers or can be continued as a personal life insurance policyWhat are the benefits to me and my employees?Employer BenefitsEmployee BenefitsAny pay out made is not subject to any income or inheritance tax.Tax-efficiency – no national insurance contributions.Cover can act as an excellent benefit for key employees.Terminal illness cover comes included.Any cover can be considered a tax-deductible business expense and no national insurance contributions will need to be paid.Any policy payments do not count towards annual or lifetime pension allowances.Some things you should take into consideration when discussing the benefits of Relevant Life Insurance policies are: Relevant life insurance cover must be taken out before an employee’s 74th birthday and will no longer be applicable after they turn 75. If an employee wishes to bring the policy with them to a new employer, the new employer must be appointed as trustee. If this is not possible, the policy can continue in trust with the employee paying their own premiums. In this case, terminal illness cover will not apply.