Relevant Life Cover is a way of providing an employee of a business with a death in service benefit, including salaried directors. The monthly premiums for the policy are paid for by the business and the policy is written in trust, paying out to the life assureds chosen beneficiaries tax free if they pass away during the term of the policy.
Although the business is paying for the policy, if the life assured dies and the policy pays out, the company itself will not receive any of the benefit. Because of this, the policy is considered a legitimate business expense and is therefore tax efficient.
Before a Relevant Life Cover policy goes live, it has to be placed in trust, so the benefit is paid to the correct beneficiaries. If the life assured dies within the term, the benefit is likely to be free from inheritance tax as it is in trust, outside of the deceased estate. This ensures the beneficiaries receive the full benefit, giving them financial stability through a very tough time emotionally.