Articles

Tuesday 12th February 2019

Why every Associate Dentist with a company should have a Relevant Life Plan

We know dentists love to be tax efficient, but we are amazed at how many have never heard of Relevant Life Cover. 

Having a Relevant Life Plan will give you peace of mind knowing your loved ones are provided for should anything happen to you.  They can be used as an alternative to life assurance taken out for a mortgage.

What is a Relevant Life Plan? 

Relevant Life Plans are a type of super tax efficient Life Assurance Policy.  They are great for small employers who want to provide individual life cover to their directors and employees.  Without the hassle of administering a group arrangement.   

Why are Relevant Life Plans so tax efficient? 

Unlike Life Assurance premiums that are paid from your taxed income.  Relevant Life Plans are paid by your company.  Your company will get tax relief on the cost of the premiums.  Relevant Life Plans will qualify as a tax-free employer benefit to you. You will have no additional income tax or national insurance to pay.

Unlike Life Assurance, on payout there is no waiting for probate.  Any beneficiaries you have listed will be promptly paid.  The plans benefit is paid tax free to a discretionary trust that is set up for you.  The trust will be outside your estate and is not eligible for inheritance tax.

Who can be covered by a Relevant Life Plan? 

For the plan to be an expense of your company.  The policy can only cover the death of the policy holder.  Who must be a director (or employee) of your company.   

Disability or critical illness cover cannot be included.  There is a restriction on the amount of cover you can take out.  Cover can be set at up to 15 times your total income.  Including salary, dividend and taxable benefits.  This is notably above what most people insure themselves for. 

How can I get a Relevant Life Plan? 

Most protection insurers in the UK sell Relevant Life Plans.  Plan costs will vary on your age, lifestyle and the amount of cover you want.  

When considering a Relevant Life Plan It makes sense to talk to your independent financial adviser. Your adviser will be able to recommend the best value cover for your needs.  They will go through the savings you can make when compared to a Life Assurance Plan.

XERO CERTIFIED ONLINE ACCOUNTANTS

We will link your business bank account to Xero software. All your income and expenses will feed directly in to Xero. This saves you time in preparing your year end paperwork, and you can even store your documents in Xero