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Relevant life insurance policies allow businesses to provide death in service benefit and critical illness cover to their employees. Plans can be taken out by a business of any size and written on a single life basis. The premiums, which are paid for by the company, may be treated as a business expense. Any cash lump sum payable to the employees/directors beneficiares is also paid out free of tax.
The policy is owned by the business but underwritten on the employees life. In the event that employee passes away or falls critically ill, the business can make a claim with the insurer. The insurer then pays the sum assured into the relevant life trust and the benefit is distributed to the nominated beneficiaries.
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