The death of any co-worker will have an impact on any business and their employees. This can be particularly devastating when this happens to a shareholder or founder of the company.
Succession planning will hopefully relieve any management conflict, protecting against death, serious illness or long term incapacity or a director; facilitating the transferring and ownership of a business, to either existing shareholders or their beneficiaries.
Group Risk and specifically Death in Service schemes are an inexpensive but highly valued employee benefit. For smaller companies wishing to enact a scheme there may also be significant tax benefits also.
Mr O Roxburgh, Commercial Director, Mobile 5 Media Ltd, London
If you are the Director of a Limited Company, a Relevant Life policy can provide you with a 49% cost saving when compared to stand alone personal life assurance plans and provide your family with financial security at a time of personal hardship.
As with standard Death in Service schemes, Relevant Life policies utilise Pensions legislation to obtain corporation tax relief on premiums. If placed correctly into a Trust, proceeds can be paid outside of the deceased's estate. For higher earners the benefits also do not contribute to the Lifetime Pensions Allowance.
This is in effect a Small group scheme; small being one on this occasion. Rather than being paid net of your salary or dividends this is out of gross company earnings and hence very efficient.
Larger group schemes also provide employees with a tangible benefit that is valued and gives your company often the first stage of an employee retention and wellbeing scheme. Recent advances in technology have made these schemes less burdensome for company secretaries and administrators and we can assist with annual reviews also.
