LV= has launched a relevant life cover product that allows employers to set up single life cover for their employees or company directors in a tax-efficient manner.
The plan is designed to provide death in service benefits to employees or directors and the premiums are paid by the employer.
The employer is not subject to National Insurance contributions for the premiums paid and should be able to claim a reduction against corporation tax, as long as HM Revenue & Customs guidelines are met. The employee is not liable for income tax or NI contributions on the premiums paid or on any benefits received.
The cover must end before the insured reaches 75 and the cover can only provide life and terminal illness cover. It must be written into trust from the outset.
It is based on LV=’s existing menu plan, flexible protection plan, which includes terminal illness and guaranteed insurability options that allow the client to increase their level of cover without disclosing any further medical or occupation details.
LV= offers a continuation option which means that if the insured leaves employment the policy will be cancelled, but if they still require cover it can be re-issued as a normal life insurance policy with the insured becoming the policyholder instead.
LV= head of protection Mark Jones says: “LV=’s Relevant Life Cover is designed to help employers to attract and retain the best people within their business by offering their employees valuable life protection at a reduced cost to the business. The continuation option means that the employee can feel confident that they are able to remain protected even if they change employer.”
Aegon, Bright Grey, Scottish Provident, Legal & General, PruProtect and Zurich all offer relevant life policies.