Relevant Life

The maximum sum assured will be limited to the life assured’s total remuneration.

Remuneration can include salary, bonuses, benefits in kind and dividends earned.

The policy can only be issued into a relevant life policy trust, which the employer will need to set up when they apply. The employee’s family or dependants can be beneficiaries.

When significant events happen the milestone benefit can be used to increase the sum assured without answering any questions about the employees health. If your client uses the milestone benefit, their premiums will change.

The significant events are:

The maximum increase that can be made to the benefit amount is the lower of the original sum assured or £200,000.

This benefit must be used within 90 days of the significant life event and can only be used if the employee is 54 years old or younger.

• Increase the sum assured
• Increase the policy term
• Review the premium if the employee previously smoked

• Reduce the sum assured
• Reduce the policy term
• Remove increasing cover
• Change the rate on increasing cover
• Increase/reduce interest rate on decreasing cover

Continue relevant life cover with a new employer

The policy can remain in the relevant life policy trust when the employee starts a new job, providing the new employer agrees to take over responsibility for the policy and the trust. Terminal illness will continue to be provided but there must be no break in premiums between the old and new employer.

Transfer ownership of the policy to the employee

If the employee leaves the business and doesn’t move to a new employer, they can take over the policy and pay the premiums themselves. Terminal illness will not continue to be provided and there will also be tax implications. For more information, see the Relevant Life Policy: Technical Guide for Employers and Employees.

We agreed that confidence in whoever is going to provide your protection solution is important to you. With this in mind, I’m able to provide some background information about Zurich which reflects their standing in the market.

Zurich Protection provides you with range of ways to protect yourself and your family against the financial impact of death, critical illness or loss of income through illness or injury. Zurich have built their products in a way that lets you choose the level of protection you need, and change it when your life changes.

Zurich is a leading insurer that serves its customers in global and local markets. With about 54,000 employees, it provides a wide range of general insurance and life insurance products and services in more than 210 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations.

From our discussion I recommend you take out level relevant life cover of £< insert level of life cover here> over a term of <insert term> with Zurich, who will pay this amount as a lump sum if <your employee / name of life assured> dies during the policy’s term. Premiums and any benefit paid are eligible for relief from income tax, corporation tax and national insurance contributions. A lump sum will also be payable if they are diagnosed with a terminal illness, as defined in the policy terms and conditions the illness either has no known cure or has progressed to the point where it cannot be cured, and in the opinion of the attending consultant, the illness is expected to lead to death within 12 months.

From our discussion I recommend you take out increasing relevant life cover of £<insert level of life cover here> over a term of <insert term> on a rate of <3%, 5%, in line with RP> with Zurich, who will pay this amount as a lump sum if <your employee / name of life assured> dies during the policy’s term. Premiums and any benefit paid are eligible for relief from income tax, corporation tax and national insurance contributions. A lump sum will also be payable if they are diagnosed with a terminal illness, as defined in the policy terms and conditions the illness either has no known cure or has progressed to the point where it cannot be cured, and in the opinion of the attending consultant, the illness is expected to lead to death within 12 months.

From our discussion I recommend you take out decreasing relevant life cover of £<insert level of life cover here> over a term of <insert term> on a rate of <2%, 4%, 6%, 8%, 10%, 12%, 14%, 16%, 18%> with Zurich, who will pay this amount as a lump sum if <your employee / name of life assured> dies during the policy’s term. Premiums and any benefit paid are eligible for relief from income tax, corporation tax and national insurance contributions. A lump sum will also be payable if they are diagnosed with a terminal illness, as defined in the policy terms and conditions the illness either has no known cure or has progressed to the point where it cannot be cured, and in the opinion of the attending consultant, the illness is expected to lead to death within 12 months.

As we discussed, it’s important that your protection fits in well with <your employee / name of life assured>’s life. Zurich have built their products in a way that lets you choose the level of cover you want, and change it when <your employee / name of life assured>’s life changes. So where they can, Zurich have made it possible for you to add or remove benefits without them having to answer questions about their health, or changes in their personal circumstances. 

With a Zurich policy, <your employee / name of life assured> will have access to Zurich Support Services, an independent team of counsellors, advisers and legal experts. They offer support in the following ways:

• Free and confidential health and wellbeing service
• Impartial help and support on a wide range of issues
• An independent service provided by Zurich’s partner, Workplace Options
• Up to six sessions of professional counselling
• Not just available at claims stage – they can be used throughout the lifetime of the policy
• Available to <your employee / name of life assured> and their family with no limit on queries or issues

Zurich Support Services is available to <your employee / name of life assured>, and their family, 24 hours a day 365 days a year and can be used from the moment they take their policy out.