WHAT IS RELEVANT LIFE PLAN COVER?
A relevant life plan is insurance for an employee in case of death in service. It’s a plan paid into by the employer, which is designed to pay a lump sum if the employee dies or is diagnosed with a terminal illness.
WHO OWNS THE PLAN?
- The business owns the plan
- They insure an employee in case the employee dies
- The insurance claim is paid to the employee’s family
Company owners and directors can also be covered under a Relevant Life Plan – it is not restricted to employees only.
Technically, Relevant Life Plans are not protection for the business, they are family protection (employees / directors / owners) whereby families benefit from the insurance, not the business. They are owned and paid for by the business, so it is categorised as a business protection.
HOW DO I CALCULATE HOW MUCH COVER I NEED?
Often relevant life plan cover amount is a multiplier of annual salary, the exact amount will depend on how much the employer would like to offer the employee as a benefit.
WHAT IS TERMINAL ILLNESS COVER?
Terminal illness is where you have been given a remaining period of time to live; normally providers will pay out a policy on life cover in the event of you being given 12-18 months to live. Terminal illness is often under life cover policies but please check with your provider and policy.
WHAT ARE GUARANTEED PREMIUMS?
These are premiums that will not change during the term of the policy regardless of interest or cost of living increases.
