A relevant life policy is a form of life insurance cover that may be provided by your employer as part of a benefits package. It's designed to pay a lump sum if you die or are diagnosed with a terminal illness, while employed.
It pays out a tax-free lump sum if you die or are diagnosed with a terminal condition while you’re still employed by the company.
Your employer will usually offer a lump sum that’s a multiple of your annual salary – for example, if you earned £20,000 per year, the lump sum could be anywhere between two and 12 times that amount. The payout will go to whoever you list as a beneficiary.
If your employment ends, the relevant life insurance benefit will end too. However, some companies allow you to transfer the benefit, so speak to your employer.
|For the employee||For the employer|
|Provides peace of mind||Tax efficient|
|Tax-free payout||Great employee benefit – even for small businesses|
|Paid for by the employer||Affordable cover|
Relevant life plans have a few differences to death in service benefits:
For that reason, relevant life plans can make a good addition to death in service cover for larger companies. And the better option for small or medium-sized businesses.