Introducing Relevant Life Policies

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Introducing Relevant Life Policies
VITALITY.CO.UK/LIFE
1
WHAT IS A
RELEVANT LIFE
POLICY?
Defined in Income Tax (Earnings and Pensions) Act 2003
• 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
2
THE
OPPORTUNITY
4.85
million
SMEs in
the UK
•
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?
3
WHO ELSE CAN
BENEFIT?

A Relevant Life Policy is suitable in many situations, not just SMEs
looking for life cover or an employee benefits package
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).
4
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).
5
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
save
50%
tax (compared
to an ordinary
•Clients
Can be
used
as nearly
a ‘top-up’
to death
in service benefit
Life Policy) when they take out a Relevant Life Policy with
VitalityLife.
6
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
7
Discounts and Rewards with VitalityLife
Monthly
cost
Upfront
discount
Cashback for
employer
each year
Vitality
Optimiser
£3.30*


Vitality Plus
£4.50*
Vitality
FREE

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

*prices applicable from 1st February 2015
8
VITALITY.CO.UK/LIFE
Vitality: incentivising behavioural change
Reward and discount partners
Vitality Plus and Vitality Optimiser partners
9
VITALITY.CO.UK/LIFE
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
10
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
11
VITALITY.CO.UK/LIFE
THREE
CONTINUATION
OPTIONS
All without further underwriting…
• 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)
12
DOCUMENTATION
Mandatory requirements
Application and trust form
Recommended
Relative
size of market
Appointment
of additional
trusteesfor each need
Expression of wishes document
Scotland only:
Mandatory requirements
Application and trust form
Appointment of additional trustees
Recommended
Expression of wishes document
13
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
14
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
15
Our Relevant Life Policy literature and tools
• 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
16
VITALITY.CO.UK/LIFE
Editable trust documents
17
VITALITY.CO.UK/LIFE
Thank you
VITALITY.CO.UK/LIFE
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