Most employers are unaware or they have not been informed of how inexpensive providing employees with a life cover policy is, as it is not mandatory in the way Workplace Pensions are. It is often provided to protect the employees family from financial hardship, in case one of your employees dies whilst in service with your company.
Any employer who has sadly experienced having to attend a funeral of an employee (who has not been provided with a life cover policy) knows this feeling all too well. As it has not been made a requirement of the Workplace pensions legislation, yet historically Group Life would be provided automatically as part of the company pension scheme. We believe adding this to your employee benefit package immediately sets you apart from the competition, but at a fraction of the cost of providing a Workplace Pension Scheme.
More importantly it is a fully tax deductible business expense and not a taxable (P11D) benefit for the individual. Research tells us happy employees that feel they are taken care of by their employers results in higher productivity.
‘Group Life’ is essentially a Death in Service benefit. It is straightforward to set up and inexpensive to maintain, yet the benefit it provides and engenders a feeling from both your employees and their families that your company is a caring business. This in turn encourages greater loyalty amongst staff members.
Relevant Life Policies
“A higher-rate taxpayer can save 49 per cent by paying for their personal life insurance via a relevant life plan. For a basic-rate tax payer the saving is around 36 per cent”
Source – “Royal London – ‘A guide to relevant life plans’ – August 2018”
Relevant Life Policies according to us are one of the best kept secrets in today's market. The UK government are allowing businesses to provide individual policies (treated in a similar way to Group Life with regards to taxation), but apply to individual policies.
This type of policy is the most suitable arrangement for providing benefit a form of ‘Death in Service’ to higher income earners. What sets them apart from Group Life is the Sum Assured and does not form part of the individuals Pension Lifetime Allowance.
For example, an employee earning £150K per annum who was provided with a Death-in-Service of 4 times salary, would lose £600K of their Pension Lifetime Allowance. This however does not apply to Relevant Life Policy holders.
It is a legitimate business expense against Corporation Tax
It is not a ‘benefit in kind’ the employee is therefore not subject to Income Taxes
The Sum Assured does not from part of the an individual’s Pension Lifetime Allowance
As relevant life policy is payable through a discretionary trust, the sum assured does not form part of the employee’s estate.
Net to Net cost can save a Higher Rate tax payer up to 49%
Who is it most suitable for?
Company Directors and key employees or high earners in the company.
Individuals trading through a Limited Company.
Companies with a small number of employees that are too small to implement group life.
Retention and recruitment of senior staff.
Employees with a large pension fund that may exceed Lifetime Allowance.
Group Life Policies are available to companies of all sizes as well as on an individual basis. This means that you can now offer different benefits to different employees. Similar to a ‘death in service’ benefit, Group Life will pay a lump sum in the event of the death of an employee you choose to cover. To obtain a quotation or for further information about Group Life Plans and Relevant Life Policies, please get in touch with our team at Keystone Wealth Management. We are on standby to assist.
For more information or to request an initial free consultation dial +44 (0) 208 939 4545
Keystone Wealth Management Ltd, Vine House, 143 London Road Kingston-Upon-Thames Surrey KT2 6NH United Kingdom, firstname.lastname@example.org