Relevant life plan is known as an assurance plan made available for employers who want to provide service benefit upon the death of an employee. When an employee dies, a lump sum from the employer would be provided, particularly if the death occurred during the term of the policy. Besides death, the plan would also cover issues, like a terminal illness, that meet the definition of the policy. Nonetheless, if not concerning death, the plan may no longer be applicable in the last 12 months of the term.
The Start of the Commitment
Although the employer is solely responsible for paying out for the plan, it is understandable that the employees have roles to keep the plan working properly. First and foremost, the employer must pay for the premiums until the end of the plan, either monthly or yearly. According to the rules, the coverage will stop a month after the due date of last premium. With regards to employees’ contribution in the plan, an honest and accurate answer must be provided whenever an accident or death occurs. Assuming the real scenario won’t help since it is the purpose of the plan’s company to also contact a doctor. Lastly, employees have the right to be informed about the changes in the policy if ever a few are implemented over the course of the policy.
The Real Advantages of Relevant Life Plan
Primarily, the death benefit, which would be provided upon a death of an employee, would be excluded to the employee’s pension lifetime allowance. Furthermore, premiums associated with the relevant life policy could be treated as a business expense for tax purposes. The employer would also be taking advantage of the fact that benefit payments would be free of income tax and are not assessable on the employee for national insurance contribution purposes.
Relevant Life Insurance Suited for Businessmen
Relevant life plan is made in order to help employers avoid the cost of providing additional death benefits to the families of individuals who died during employment in a company. Furthermore, the plan is highly beneficial if an employer does not wish to provide tax efficient additional benefits, especially in arrangements for the existing death.
Cost Savings Assured With the Plan
According to the studies, the life plan can be similar to other life coverage insurance options. However, its difference can be traced on the tax efficient benefit it can provide to the employer. Instead of suffering from tax issues, an employer could save up to 50% on taxes by just complying with the premiums extended in the plan.
Portability at Its Best
The relevant life insurance could be fully portable. In other words, a new employer could take over the premium payment over the course of the plan. The new employer would also be considered as the trustee of the trust. Existing trustees are the ones responsible for appointing the new employer as the trustee. Practically, contacting the company offering relevant life plan is necessary to ensure that other formalities would be clarified in due time.