Relevant Life Plan
Providing added peace of mind for your people is a benefit to both them and your business. As part of a wider benefits package, it can help to attract and retain the best people. Which in turn will help your business to thrive and grow.
What is a Relevant Life Plan for?
Relevant Life Plans (RLP) offer life cover that is also highly tax efficient - in fact, BPS Business can show you how this type of policy may be able to save up to 50% on the cost of a conventional life policy.
A Relevant Life Plan is a simple term assurance product popular among owners of Limited Companies. BPS Business will listen to your circumstances and advise on a suitable policy to meet your needs. Set up and paid for by the employer, the Plan will pay out a tax free lump sum (under legislation current in tax year 2014/15) to the employee's loved ones should they pass away during the term of the policy.
Relevant Life Plans make it possible for employers with just a few employees, high earners and Directors to take advantage of 'death in service' benefits.
Unfortunately sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership cannot take advantage of Relevant Life Plans - if that's you, ask us what your best alternatives are.
What does a Relevant Life Plan cover?
A Relevant Life Plan pays out in the exact same way as a normal life insurance policy upon the death of the life assured while also offering significant tax savings.
Depending on your exact circumstances, you can cover up to 25 times you annual remuneration (salary and dividend) from the business, until your 75th birthday.
How does a Relevant Life Plan work?
BPS Business can advise on a suitable Relevant Life Plan on the life of the employee or owner. We also advise that, because none of the tax breaks are automatically given at source, you and your Accountant be aware of how best to claim this tax efficiency.
If all qualifying conditions are met and your accountant is aware of the tax consequences of the Relevant Life Plan then the arrangement can save over 40% if the life assured is a basic rate tax payer or almost 50% if the life assured is a higher rate tax payer (under legislation current in tax year 2014/15).
We can work directly with your Accountant, answering their queries and ensuring you benefit from the tax savings.
Comparing the cost of a life policy to a Relevant Life Plan
A saving of £769.95, which is a saving of almost 50%.
Based on legislation current in tax year 2014/15.
*An employer who wishes to treat Relevant Life Plan premiums as an allowable business expense should speak to their accountant, who may wish to liaise with the employer's local inspector of taxes.
Do I need a Relevant Life Plan?
If you are eligible, have a need for life cover and wish to potentially save money, the answer is yes. If you're currently paying for life insurance to protect your family from a personal account, you may be able to save up to 50% on the premiums over a conventional life policy.
In our experience, we have often seen Company Directors who are paying too much for their personal life assurance from their personal finances.
A Relevant Life Plan will help ensure you are covered, without compromise, in a tax efficient manner. We're happy to discuss the excellent savings that may be possible with your Accountant and advisors from the outset.
The real question is: can you afford not to have it?
What are my options?
Ask Us - we make getting Relevant Life Plan quick and easy because we ask the right questions, research your options and present a suitable, cost-effective solution.
You can be confident in advice provided by an experienced protection insurance advisor who draws on his Chartered Accountancy background to specialise in helping business owners address these specific issues.
We do not charge fees for our advice and policies can start from under £10 per month.
Call us on 028 3833 8000.