Relevant Life Cover is a tax efficient way for employers to give individual death-in-service benefits to employees outside of a registered group life scheme. It pays out a lump sum if the employee dies, or is diagnosed with a terminal illness during the term of the policy.
It is paid for by the employer and must be written in Trust before the policy can start. This makes sure the lump sum payment can be paid to the employee’s chosen beneficiaries.
Basis of cover
Level - available as a lump sum.Increasing - available as a lump sum. The sum assured will increase each year in line with the Retail Price Index (RPI). The increases will be at least 2% up to a maximum of 10%.
Level - £25,000,000Increasing - £15,000,000 (annual increases are allowed up to a total of £30,000,000)
Yes, our definition of terminal illness is:
On a valid terminal illness claim, the benefit amount will be paid out and the policy will end.
Terminal illness will no longer apply if the person covered takes over ownership of the relevant life policy, as it will no longer be in trust.
An employer's business which is UK registered, and the employee who is habitually resident in the UK (meaning England, Wales, Scotland, Northern Ireland but not the Isle of Man or the Channel Islands), has a UK bank account and is not:
The employer will own the policy and the employee will be the person covered but as Relevant Life Cover is written in trust, for the employee’s beneficiaries, the pay out will go into the trust in the event of a claim.
This amount can vary depending on how the policy has been set up:
Relevant Life Cover must be taken out before the employee reaches their 74th birthday and will cease on their 75th birthday.
If the employee stops working for the employer there are three options available:
If the policy is to be assigned to the employee, careful consideration should be given to the tax implications of doing so by consultation with their local tax office.
We offer personal Guaranteed Insurability Option (GIO) for Relevant Life Cover. For full details please see our Policy Provisions.
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Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.
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