Life insurance is an essential component of financial planning, providing peace of mind and financial security for your loved ones. But what if you also need to protect your business? That’s where Royal London’s Relevant Life Policy comes in. This unique policy offers customisable coverage options tailored to the needs of both individuals and their businesses. In this guide, we will explore the basics of Relevant Life Policy, eligibility criteria, customisable coverage options, tax efficiency, and the application process, and provide real-life case studies of its benefits. As a relevant life insurance broker, we will also suggest you contact us and get the most suitable life insurance policy as per your needs.
The Basics of Relevant Life Policy
A Relevant Life Policy is a specialised type of life insurance that differs from standard policies. It is designed to provide an attractive solution for individuals seeking customised cover that is tax-efficient and flexible.
One of the key benefits of a Relevant Life Policy is its tax efficiency. Unlike traditional life insurance policies, premiums paid towards the Relevant Life Policy are tax-deductible for the business. This can result in significant savings in the long run.
Moreover, Relevant Life Policies offer flexibility in terms of coverage and premiums. The policy can be tailored to an individual’s specific needs, allowing for the inclusion of additional benefits such as critical illness coverage and terminal illness benefits.
Eligibility and Qualifications
While the Relevant Life Policy offers several benefits, it is important to understand the eligibility criteria for obtaining this policy.
Generally, individuals who can qualify for a Relevant Life Policy from Royal London are company directors, business owners, and individuals classified as employees with specific employment benefits.
The acceptance of a Relevant Life Policy and the premiums attached may be affected by certain factors. Age, health, and lifestyle considerations may impact the application process. Additionally, occupation and industry specifics can play a role in determining eligibility and cost factors. If you are interested, you can also contact our team of expert insurance advisers to help you with your insurance policy. Apart from Royal London, we also have a range of other insurers to offer the most suitable policy as per your needs.
Customisable Coverage Options
One of the key features of Relevant Life Policy is the ability to customise coverage options to suit individual needs and circumstances.
Individuals have the flexibility to choose the appropriate level of cover for their unique circumstances. This allows for a tailored approach to life insurance, ensuring that the policy adequately protects loved ones and business interests
Some of the additional benefits that can be included in a Relevant Life Policy are income protection, critical illness cover, and terminal illness benefits. These options provide comprehensive coverage and an added layer of financial security.
Tax Efficiency and Savings
One of the standout advantages of Relevant Life Policies, such as Royal London, is its tax efficiency, offering significant savings for both individuals and businesses.
For individuals, Relevant Life Policy premiums are not subject to income tax or National Insurance contributions. This tax-saving feature allows policyholders to maximise their cover without incurring additional tax burdens..
For businesses, Relevant Life Policy premiums are tax-deductible. This means that the premiums paid are considered an allowable business expense, resulting in potential savings in corporation tax.
By taking advantage of these tax benefits, individuals and businesses can save on their overall tax liabilities while still ensuring adequate life cover. However, these are changed on a daily basis, so we would suggest you to contact a specialist insurance adviser to help you with the latest available benefits.
Application Process and Support
If you are considering a Relevant Life Policy from Royal London, the application process is straightforward, and comprehensive support is available.
The application process involves the submission of relevant information such as personal details, occupation, and desired coverage options. Once the application is submitted, Royal London’s dedicated team will review the details and provide guidance throughout the process.
To understand this insurance product we have created two case studies to help you understand the features and benefits of the Royal London Relevant Life Policy.
Case study 1
John is a 45-year-old self-employed business owner with a family of 5. He has been considering life insurance to protect his family in case something happens to him. With a Relevant Life Policy from Royal London, John can ensure that his family will be taken care of financially if the worst were to happen. By customising his policy with critical illness cover, he ensures that his family will receive financial support in case of a critical health situation. Additionally, the tax-efficient nature of the policy provides savings for both himself and his business.
Case study 2
Mary is a 35-year-old entrepreneur with two children and a business that she is looking to protect in case something happens to her. With a Relevant Life Policy from Royal London, Mary can have peace of mind knowing that her business interests will be taken care of and her family will be provided for if anything were to happen. By customising his policy with critical illness cover, he ensures that his family will receive financial support in case of a critical health situation. Additionally, the tax-efficient nature of the policy provides savings for both himself and his business.
These case studies are just for understanding concepts and do not relate to real-life cases. Every case is different and has individual needs and requirements.
Royal London’s Relevant Life Policy provides a unique opportunity to secure life cover that protects both your loved ones and your business interests. Its tax efficiency, customisable coverage options, and affordability make it an attractive choice for individuals seeking tailored life insurance. By understanding the eligibility criteria, exploring coverage options, and taking advantage of tax savings, Relevant Life Policy offers peace of mind and financial security.
Q1. What is a Relevant Life Policy, and how does it differ from a traditional life plan?
A1. A Relevant Life Policy, also known as a relevant life plan, is a specialised form of life insurance designed for individuals and businesses. It differs from a traditional life policy by offering tax-deductible premiums for businesses, adaptability to individual circumstances, and the option of including discretionary trusts.
Q2. Who is eligible for a Relevant Life Policy, and what role can a financial adviser play in this?
A2. Eligible individuals for a Relevant Life Policy, such as eligible employees under relevant legislation, may include company directors and business owners. Consulting a financial adviser is advisable to maximise the tax benefits and cover options while avoiding tax avoidance issues.
Q3. What are the key benefits of including a discretionary trust in a Relevant Life Policy?
A3. By incorporating a discretionary trust into a Relevant Life Policy, policyholders can potentially reduce inheritance tax liabilities. This trust allows the policyholder to appoint beneficiaries and provides flexibility in managing the policy’s proceeds.
Q4. How does a Relevant Life Policy comply with pensions legislation, and what is the significance of the lifetime allowance?
A4. Relevant Life Policy aligns with pensions legislation, making it a tax-efficient option. The lifetime allowance is the maximum amount of pension benefits an individual can receive without incurring additional tax charges. Relevant Life Policy can help individuals with substantial pension funds manage their allowances.
Q5. Can a Relevant Life Policy be used as a death in service plan for high-earning employees in a limited company?
A5. Yes, a Relevant Life Policy can serve as a death in service plan for high-earning employees within a limited company. It provides tax-efficient life cover and is considered an allowable expense for the company. However, we would suggest you contact your insurance adviser for the updated information.
Q6. What is the process for calculating the maximum cover for a Relevant Life Policy, and how does it relate to the nil rate band?
A6. The maximum cover for a Relevant Life Policy is determined by the individual’s circumstances and the nil rate band. It’s advisable to consult a financial adviser to calculate the appropriate cover, considering factors such as income tax, inheritance tax, and the individual’s needs.
Q7. Is it possible to include critical illness cover in a Relevant Life Policy for a sole trader or a director with life cover?
A7. Yes, critical illness cover can be included in a Relevant Life Policy for sole traders and directors with life cover. This option provides additional financial security in case of critical health situations.
Q8. How does the tax benefit of a Relevant Life Policy differ from an ordinary life insurance policy?
A8. Relevant Life Policy premiums are tax-deductible for businesses and not subject to income tax or National Insurance contributions for individuals. This tax efficiency sets it apart from ordinary life insurance policies.
Q9. What is the role of Royal London in providing a Relevant Life Policy, and do they offer a legal helpline?
A9. Royal London offers Relevant Life Policies, providing coverage tailored to individual and business needs. They also offer a legal helpline for policyholders, ensuring comprehensive support and guidance.
Q10. How does a Relevant Life Policy address the annual allowance in pensions legislation?
A10. A Relevant Life Policy can help individuals manage the annual allowance in pension legislation by providing a tax-efficient alternative to traditional pension schemes. It offers flexibility and cost advantages while staying within allowable expense limits.
Please note that this information is subject to change, and it’s advisable to consult a financial adviser for the latest details and plan specifics.