introducing relevant life policies

1VITALITY.CO.UK/LIFE

Introducing Relevant Life Policies

2

WHAT IS A

RELEVANT LIFE

POLICY?• Life cover only

• Employer sponsored

• Single life assured

• No surrender value

• Policy ends before age 75

• Benefits in trust created at outset (for an individual or charity)

• Not part of employees annual pension or lifetime allowance

• Main purpose of the policy must not be tax avoidance

Defined in Income Tax (Earnings and Pensions) Act 2003

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THE

OPPORTUNITY

• A great employee benefits package for SMEs with low buying power to provide employee benefits

• SMEs that are too small for ‘death in service’ benefits

• Company directors looking to save on tax

• Flexible cover - reward specified employees or provide variable cover

• High earners – Relevant Life Policies do not count towards Lifetime Allowance

Which of your corporate clients:

• Would like to reward their top employees?

• Would like to be able to offer a benefit to retain their top people?

• Would like to make their recruitment package more attractive?

4.85 million

SMEs in the UK

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WHO ELSE CAN

BENEFIT?

Company directors

• Directors of limited companies can enjoy valuable tax benefits if the premiums for life insurance are paid by one company instead of from personal income after tax.

Flexible cover

• A Relevant Life Policy can provide individually calculated cover levels so are suitable where companies only want to reward several employees or provide variable cover.

High earners

• The benefits of Relevant Life Polices do not count towards the current Lifetime Allowance of £1.25 million, above which tax is currently charged at 55% tax (on death).

A Relevant Life Policy is suitable in many situations, not just SMEs looking for life cover or an employee benefits package

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BIG BUSINESS

BENEFITS FOR

SMALL

BUSINESSES

Relevant Life Policies from VitalityLife allow you the chance to offer your clients a benefits package for their employees.

Not only does that help with recruitment and retention but healthy employees are: •more engaged

•take less time off

•more productive

On top of all that, if your clients take out Vitality Plus or Vitality Optimiser, they can also get cashback (based on how much their employees engage with Vitality).

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VITALITY PLUS

AND OPTIMISER

CLIENT

BENEFITS

• Tax efficient – a tax deductible business expense and no National Insurance contributions

• A great employee benefit for small businesses, life cover and

a healthy living rewards programme that can help attract and retain the best people

• More affordable cover – An upfront discount on the protection

premium of between 5 – 20% for fixed term cover with Vitality Optimiser

• Your clients could receive up to £100 cashback each year with Vitality Plus or Vitality Optimiser depending on how much their employees engage with Vitality

• Fitter, healthier, more engaged employees that take less time off and are more productive

• Available to companies of all sizes on an individual basis

• Can be used as a ‘top-up’ to death in service benefitClients can save nearly 50% tax (compared to an ordinary Life Policy) when they take out a Relevant Life Policy with

VitalityLife.

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BENEFITS FOR

YOUR CLIENTS

EMPLOYEES

• Cash lump sum payment for terminal illness as well as death

• Reward your client’s employees with our healthy living

rewards programme

• Access to a range of discounts and rewards to encourage your

client’s employees to look after their health

• Tax efficient – no National Insurance contributions

• On payout, the cash lump sum is not subject to Income Tax or

Inheritance Tax. If they leave the company, we’ll make it easy for them to take the policy with them, so they can ensure their cover continues

• It doesn’t count as a retirement benefit so won’t affect their

Lifetime Pension Allowance

VITALITY.CO.UK/LIFE

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Discounts and Rewards with VitalityLife

Monthly cost

Upfront discount

Cashback for employer each year

Premium discount for

employer each year

Discounts and savings for employees

Additional rewards for employees

including 50% off monthly

gym fees and a cinema ticket every week

Healthier, fitter, more engaged

and more productive employees

Vitality Optimiser

£3.30*

Vitality Plus £4.50*

Vitality FREE

*prices applicable from 1st February 2015

VITALITY.CO.UK/LIFE

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Vitality: incentivising behavioural change

Reward and discount partners

Vitality Plus and Vitality Optimiser partners

VITALITY.CO.UK/LIFE

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Tax saving example

This example is for illustrative purposes only and is based on VitalityLife’s understanding of the law and HM Revenue & Customs

practice as at December 2014.

VITALITY.CO.UK/LIFE

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Relevant Life Policy in contrast

Relevant Life Policy

Death in Service Personal Cover

Variable cover per life assured

Y N Y

Minimum members 1 5 1

Individual applications

Y N Y

Employer sponsored employee benefit

Y Y N

Tax efficient employer/employee

Y Y N

Online application Y N Y

Medical free limits N Y N

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THREE

CONTINUATION

OPTIONS • Replacement policy - replace with a personal

protection policy (if not yet reached 65th birthday)

• Corporate - taken over by new employer (no age

limit)

• Personal - personally take over the policy on the

same terms and conditions (no age limit)

All without further underwriting…

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Relative size of market for each need

DOCUMENTATION

Mandatory requirements Application and trust form

RecommendedAppointment of additional trusteesExpression of wishes document

Scotland only:

Mandatory requirements Application and trust formAppointment of additional trustees

RecommendedExpression of wishes document

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SOME THINGS

YOU NEED TO

KNOW…

‘Remuneration’ defined as:

• Salary

• Bonuses

• Dividends; and

• P11d benefits

Eligible - if ‘Schedule E’ taxpayer

• An employee of a:

• Sole trader

• Partnership

• LLP

• Limited company

• A shareholding director employed by a limited company

Ineligible - if not ‘Schedule E’ taxpayer

• A sole trader

• An equity partner

• An LLP member

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OUR STREGTHS Online application and editable trusts

Indexation option available

High cover limits – up to 15 or 20 times remuneration

(dependent on age)

Three continuation options, all without further underwriting

Tax savings calculator

Avelo Exchange, Assureweb & Webline portals

Large case underwriting assistance

Local and specialist support

VITALITY.CO.UK/LIFE

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• RLP Tax Saving Calculator

• Vitality for Business pitchbook

• RLP with Vitality technical article

• RLP FAQs

• RLP pitchbook

• RLP client sales aid

• RLP tax-saving sales aid

• RLP letter templates

• RLP Adviser and Client Guides

• Business Protection client sales aid

• RLP application form

• Vitality Calculator

Our Relevant Life Policy literature and tools

VITALITY.CO.UK/LIFE

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Editable trust documents

VITALITY.CO.UK/LIFE

Thank you