What is a Relevant Life Plan?

A Relevant Life Plan is a term assurance plan available to employers to provide an individual death in service benefit for an employee.

With the lifetime allowance reducing in April 2014 to £1.25 million from the current £1.5 million providing death in service benefits for employees can inadvertently create potential tax problems for those high earners with substantial pension funds. Any life cover paid out in a ‘lump sum’ from a registered death in service scheme will be included as part of the deceased employee’s lifetime allowance at that time. If this benefit takes them over the current lifetime allowance threshold of £1.5m (tax year 2012/13), a tax charge of 55% may be applied to the excess.

Who is it aimed at?

Employers looking to provide ‘death in service’ benefits, but with too few employees to set up a group scheme.

Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees.

High earning individuals, such as directors, where ‘death in service’ does not form part of their ‘lifetime allowance’ (£1.5 million 2012/13).

This video aims to help you understand why you might need this type of cover and if you would like any more information please contact us to arrange a meeting to discuss how we can help advise you.

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