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What are The Benefits of Switching Life Insurance to Relevant Life Cover?

What are The Benefits of Switching Life Insurance to Relevant Life Cover?

Relevant life cover can be regarded as a death in service plan. This plan is put in place to make sure a sum of money is provided to the loved ones or family of an insured in case the person dies while in service for a company.

Payments for these plans are made on behalf of a director or employee by the company they are working for. The insured has the power to decide the person to whom the money would be paid once they die; hence, relevant life covers have to be written into trust.

In case you have a business you are running and you own a life insurance policy that does not concern your business, you could save lots of money on national insurance premiums and tax by switching to relevant life cover.

This relevant life cover can also serve as an allowance business expense, which will permit deduction of money for the plan from profit made by businesses and this will ensure that the amount of corporation to be paid is reduced to an extent.

Is it possible to Pay Relevant Life Cover as a Lump Sum?

Yes, it is possible to make payment for Relevant Life Cover on a monthly basis or once for the whole year. Though paying monthly premiums is often the best option for lots of businesses, you have the opportunity of making a single payment for the whole financial year.

How Can I Change the Life Insurance I Have to a Relevant Life Policy?

To understand whether making this change is right or not, it will be helpful to speak to an adviser. You are likely not going to benefit from making a switch if you own a policy that has been in place for lots of years. In case there is need for you to increase the amount your policy covers in terms of getting more costly cars, making payment for a larger mortgage or having more children, it will be more reasonable to take out a relevant life policy to complement the cover you have already.

You will benefit from taking out a relevant life cover if the term for your existing policy is drawing closer to an end; nevertheless, it must be noted that life cover will stop functioning when you are up to the age of 75.

If your business would like to provide an extra benefits to you, your loved ones, family or your employee, relevant life cover will be very suitable in such situation. Relevant life cover normally offers addition covers for your existing covers, such as income protection or critical illness cover, which only offer protection for you, not your loved ones or family.

Do I Have to Cancel Life Insurance Plan I Have Already?

It does not save cost to cancel an existing policy if you have a plan that you have been running for years, especially when you consider the tax saving option described above. In this situation, relevant life cover should be considered as an additional cover for extra amount of money.

However, if your existing policy has only been running for few months, it is suggested that you cancel it to make more savings.

If I Abandon the Business, What Would Happen?

If you have Relevant Life Cover on your business and you decide to leave the business, you have the ability to transfer the cover from the business to a new one. The same is applicable if you prefer to make the Relevant Life Cover a personal plan.

What Happens If the Business is Bankrupt?

Provided payments for all the monthly premiums were up to date, you have the privilege of transferring the Relevant Life Cover from the business that was declared bankrupt to a new business or to a personal plan.

In case this option does not look financially possible, you are allowed to cancel the whole plan whenever you want to without any negative effects. However, it must be noted that any premiums that have been paid for at this moment of cancelation would be forfeited.

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Quotes shown are for a 40 year old male who doesn’t smoke. Policy is £100,000 life insurance cover for ten years with a fixed premium. Example is for illustrative purposes only and was correct on 21/11/2016.

FREE impartial advice from the experts

  • Life Insurance

    The most common form of protection, ordinary term life cover pays a lump sum to your family if you die within a certain time-frame. Most policies will also pay-out if you’re diagnosed with a terminal illness and have less than twelve months to live

  • Critical Illness Cover

    Critical Illness Cover provides a cash lump sum if you suffer from a range of serious conditions within a set time-frame. The money is normally used to pay the bills and provide financial security while you’re on the road back to health

  • Income Protection

    If something serious happens to stop you working - for months, years, or even for life – you’ll want to know you have financial security and that the bills are paid. Income Protection gives you just that, paying a percentage of your income all the time you’re unable to work.

  • Private Health Insurance

    The NHS is groaning under the weight of the UK obesity crisis and newer, more effective medical treatments for a range of illnesses often aren’t available. Private medical cover makes ‘going private’ much more affordable – giving you access to more treatments, shorter waiting lists, and first-class care.

  • Relevant Life Cover

    Most company directors are savvy enough to have life insurance, but very few realise they can save up to 53% by taking advantage of a Relevant Life plan.

  • Group Life & Health

    Group Life and / or Health Cover is the most cost-effective way to provide peace of mind and financial security for the families of your employees.

  • Key Man Cover

    Key Person Insurance - often called Key Man Cover - is an insurance policy bought and owned by a business to protect its own interests. Cover is provided in the event that an important staff member is suddenly unable to work through critical illness and/or death.

  • Shareholder Protection

    Shareholder Protection Insurance is designed to give you peace of mind in the event that a shareholder in a Limited Liability Company, a member of a Limited Liability Partnership (LLP), or a partner in a partnership dies or is diagnosed as critically ill.


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