Relevant life cover
Relevant life cover is a form of death-in-service benefit that pays out to a staff member’s family or benefactors upon their death or diagnosis of a terminal illness. Relevant life cover could help your family to afford funeral bills or cover any outstanding debts after you pass away, which could take a huge amount of stress off of their shoulders. Often people are unsure whether relevant life insurance is appropriate for them, meaning that many eligible people miss out on this excellent benefit. So, when is relevant life cover not appropriate? To help you understand whether or not a relevant life cover may be the right option for you, this article will guide you through what the cover is, who is eligible and when it may not be an appropriate choice.
What is relevant life cover?
Around 4 in 5 people worry about coping financially in the event that their partner passes away. For those who do struggle, this can make the loss of a loved one even harder to cope with than if the financial burdens did not exist.
A relevant life policy is a benefit that can be given to families in the event of loved ones passing. Relevant life cover is set up by a company but is paid to the family members or benefactors of a staff member at the time of their death or diagnosis of a terminal illness. Relevant life cover works similarly to regular life insurance, however, it is down to the business to pay the premiums rather than the individual. This means that the company will only pay out if the individual works for them at the time of their death.
The amount that individuals can receive from their benefit will be based on a multiple of their salary. Higher relevant life covers can be given to those who have a particularly high salary. A person can have a relevant life insurance policy in conjunction with other forms of life insurance, which makes it a nice added extra to offer employees.
How do you apply for relevant life cover?
To receive relevant life insurance, you will need to ask the company that you work for to take out a policy on your behalf. This is because the company will be responsible for paying the monthly premiums. Companies who offer this insurance to their employees will usually make it known, as this can be a huge benefit to working for them. If your company does offer this cover, you should arrange an assessment to see how much your family could receive from the insurance.
Depending on the size of the company, some companies will only take out relevant life insurance for individuals who present a definite need for the cover. The amount of life cover that you receive from the insurance will depend on how you are assessed, your salary and the summary of any debts that you may have. If you are a company looking to supply relevant life cover for an employee, speak to our experienced team today.
Who is eligible for relevant life cover?
To successfully take out a relevant life plan, a few requirements must be met. Any employee of a business, limited company, partnership, charity or sole trader can be eligible for relevant life insurance.
When might relevant life cover be appropriate?
Relevant life cover is ideal for small businesses that cannot set up group life insurance schemes. Relevant life cover is tax-free and an excellent benefit to offer employees if you cannot afford a larger scale life insurance plan.
Relevant life insurance is also ideal for employees who are nearing their maximum allowances. You can take out relevant life insurance alongside group plans and the cover does not count towards annual or lifetime pension allowances. This is a great solution for high-earning employees who are nearing their maximum allowances but want to take out more cover so that their families can be financially secure if they pass away.
When is relevant life cover not appropriate?
Relevant life insurance cannot cover any employees who live outside of the UK. If you have staff members who work from outside of the country, relevant life cover will not be appropriate for them
We offer expertise in many areas of insurance and could help you to understand more about relevant life cover. If you would like to know more about the policies that could be available to you, get in touch with our team today.