Relevant Life Cover
Relevant life cover is an insurance policy taken out by businesses for the benefit of their staff. If a covered employee dies while they’re working for the company, then the insurance company will make a lump-sum pay out to the family of the deceased. It’s a way of giving a benefit to a director or employee of the company, and there are related corporate tax benefits, too.
In general, it’s designed for smaller companies who only have a handful of employees to offer something akin to life insurance — that type of insurance can be costly and difficult to set up if there aren’t too many staff members.
There are multiple reasons why a company would want to take our cover for its employees. For starters, it’s another benefit that can help keep morale high and your best employees on side. Second, there are significant tax benefits to taking out these kinds of policies; while it is a benefit to everyone, it’s not treated as a benefit-in-kind, which means the business can treat as an expense for tax purposes. Because there’s not a “group” aspect for this type of insurance, businesses can select who within the company receives the benefit, and who doesn’t. It may be given as a reward in return for a certain number of years service, for example.
All companies have a duty to look after their employees. By offering relevant life cover, you’ll be offering an additional incentive for your employees to continue working with you. This, combined with the many tax benefits, makes it an attractive proposition for business owners.
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