Relevant Life Insurance – All Your Questions Answered

There are many insurance policies out there that can protect both us and our loved ones in unforeseeable circumstances, including relevant life insurance. At Weystone Financial, we have comprised a list of the most asked questions regarding relevant life insurance, to help you gain a better understanding of this policy and how it can benefit you. 

Q. How does relevant life insurance work? 

A. Relevant life insurance works as a cost-effective life cover, taken out by a business in an employee’s name. The monthly premiums are paid as a business expense and the insurance policy is often a benefit of employment. Should the employee pass away, the policy is then payable to the family or any financial dependents (such as children and partners). 

Q. Is relevant life different from personal life insurance?

A. Relevant life insurance is different as it is taken out by a business on behalf of an employee, and often included as an employment benefit. Personal life insurance is taken out by an individual for their own benefit and is done so on a personal basis. If a company doesn’t offer relevant life insurance, some people decide to take out a personal policy instead. 

Q. How many relevant life insurance policies can I have?

A. You are allowed to have multiple relevant life insurance policies, as long as their purpose is to provide benefits to the beneficiary’s dependents. You can also take out both personal and relevant life insurance if you wish to do so. It’s worth noting that relevant life insurance policies usually end once you’ve retired or have left that company.

Q. What are the benefits of having relevant life insurance? 

A. There are many benefits of having relevant life insurance as an employee. Relevant life insurance protects your dependents financially, paying out in the event of your death. These policies are also tax efficient for the employers and are a cost-effective way of supporting an employee’s family financially. For this reason, they are particularly beneficial for small businesses. 

Q. What does relevant life insurance cover? 

A. Relevant life insurance, provided by a business, covers an employee’s dependents financially in the event of the employee’s death. Certain life insurance policies can also cover critical illness, providing the employee with financial assistance should they be diagnosed with a terminal illness and become unable to work. However, this decision is up to the discretion of the business. 

Q. When should I invest in relevant life insurance? 

A. As a business, you can invest in relevant life insurance policies for your employees at any stage, regardless of their age or income. As relevant life insurance is tax-deductable, companies big and small can benefit from including this policy in their terms of employment. As an employee, you cannot invest in relevant life insurance but instead should invest in personal life insurance if not provided by the employer. 

Personal life insurance is best taken out at a younger age, as your premiums will be lower. 

For more information on relevant life insurance or personal life insurance policies, please get in touch with us at Weystone Financial.