What is “Business Protection”? If you are a business owner, you may have heard of “business protection”, but what does this actually mean? The short answer is that there are different types of business protection, so let’s look at them one at a time. Next, let’s look at Relevant Life
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. It's designed to pay a lump sum if the person covered dies or is diagnosed with a terminal illness, whilst employed during the term.
A Relevant Life Plan is paid for by the employer, but the claim proceeds are paid to the employee.
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.
It should be noted that Relevant Life Plans are not available where there is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.
What makes it cost effective?
Relevant Life Plans are similar to most other types of life cover except they aim to provide a tax efficient benefit provided by an employer for an employee, and as such a Relevant Life Plan can work out much cheaper than a typical life policy.
Next Up: Share Protection