A Relevant life policy is a type of life insurance policy that is specifically designed for company directors and employees who are not eligible for traditional group life insurance schemes. Here are some of its features:

1. Tax-efficient: Relevant life policies are set up as a tax-efficient way to provide life cover for employees. Premiums paid by the employer are usually treated as an allowable business expense, and the death benefit is paid out tax-free to the beneficiaries.
2. Flexible: Employers can choose the level of cover they want to provide for their employees, and the policy can be adjusted as their needs change. The policy can also be transferred to a new employer if the employee changes jobs.
3. No benefit-in-kind tax: Since the premiums are paid by the employer, the employee does not have to pay any benefit-in-kind tax on the policy.
4. Competitive pricing: Relevant life policies can often be less expensive than traditional group life insurance policies, especially for younger and healthier employees.
5. Minimum and maximum ages: Typically, an employee must be between 18 and 75 years old to be eligible for a relevant life policy.
6. No cash-in value: Relevant life policies do not have a cash-in value, so the only payout is in the event of the employee's death.
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What makes this plan so good?

Offers a cost-effective way to provide life insurance with terminal illness cover benefits to your employees.
 Effectively make a saving on life cover compared with paying for it personally. 
Premiums are normally classed as a business expense and so are likely to be an allowable deduction for Corporation Tax purposes.
 Keeping the plan in trust offers the potential to plan for Inheritance Tax if your estate is or is likely to be worth more than the current Inheritance Tax threshold.

How do you calculate the amount of cover?

The reason for the policy being taken out is to provide protection for the employees family. The lump sum amount paid would be based on the lost income of the employee. The maximum amount of cover available usually depends on the employee’s age and their overall remuneration, including salary, bonuses and regular dividends. 

The table below shows the calculations available when looking at death in service for Employees. You may offer more remuneration to Employees that have key roles or have been with your company for a long time, other factors are the costs that the Employer is happy with and the age of the Employee. Some Employers want to keep the same remuneration for each Employee so that is fair across the board.