Facts you should know about Relevant Life Policy

• This is a term insurance policy, provided by an employer on the life of his employees and it is funded by the employer.
• According to this policy a lump sum amount of money is payable to the family members on the death of an employee.
• If the employee changes the job, or retires, he no longer gets to enjoy the benefits.
• One can extend the term of the policy using the continuation approach. This option allows the employee to opt for a life policy for the same amount of money for the remainder of the term.
• The delivery of the benefits are payable till the client reaches the age of 75.
• This policy doesn’t provide any other benefits and does not offer any surrender value. Only the prescribed benefits are paid under this policy.
• One cannot apply for this policy only in order to avoid tax payments.
• The employer, who provides these benefits, must be subject to a special relevant life policy trust.
• This policy is especially designed to meet the criteria of a single life cover.
• Unlike many other life insurance covers, relevant life policy allows to add a terminal illness benefit or disablement benefit, during the service period of the employee.
• A discretionary trust is made through which the payment is made to the family members.
• The benefits should be given to a family member who can assure that the sum is transferred to the right person.

Well, having mentioned the exclusive features of relevant life policy, let’s take a look at the substantial tax benefits, that one can enjoy by opting for one –

• The premiums of this policy are not paid as benefits in kind and as a result of this they are tax free.
• Earlier, when a owner of a company or some shareholder wanted to purchase any such policies they had to pay the premiums either from their post tax earnings or from the company’s account. Apart from this, the tax premiums were subject to serious tax burdens. On the other hand the premiums of relevant life policy are paid by the employer in a very tax efficient manner.
• As the premiums are considered as trade expenses, the employers enjoy certain corporation tax relief.

By Sam Payn

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Research: As you have acquired a fair idea of what a family income benefit cover is you should compare the premiums provided by each insurance carrier in the market. Find out what percentage of your income will be paid back to your family each month after you die. See if all the insurance companies are promising the same amount or not. Comparing the premiums only will not suffice in this regard. Check out the scheme in its entirety and then settle for your preferred carrier.

Critical Illness Cover: Know for a fact that you can add the Critical Illness Cover to the policy. In that case if you are diagnosed with a specific critical illness then an income would be produced in a monthly, quarterly or yearly basis as is suitable. In case you are diagnosed with such a disease and have a partner who will not be able to cope with the expenses you should not depend solely on a Life Cover here.

Family Income Benefit Quote: While you are researching on the Family Income Benefit Insurance online you will be provided with a Family Income Benefit Quote. Do not forget to avail the opportunity of spelling out the free insurance quotes online.

Consider the possibility of indexation for your cover: Indexation of the cover availed by you is important as it will protect it from the adverse effects of Inflation. Both the sum assured and the term of the policy should be clearly given proper thought. If for instance you have two children aged 10 and 15, the policy term can easily be 15 here whereby both your older and younger children are sufficiently grown up to fend for themselves. If you have a mortgage protection policy make sure your family has the minimum income required to keep things in place after the mortgage has been repaid by the mortgage protection policy.

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6 Ways to save money on life insurance

You buy life insurance policy to secure the future of your family members and, at the same time, save money. Below are discussed about the 6 ways how you can save money by purchasing life insurance policy.

1.Shop around thoroughly before buying a policy – The different insurance companies charge different premium amount on the same kind of policies. It is your responsibility to find out the suitable insurance policy as per your need with the most affordable premium you can afford to pay. As such, it is very important on your part that you shop around very carefully before you decide to buy life insurance from a particular insurance company.

2.Buy insurance policy only if required – Buying life insurance policy is important since it helps you know your financial responsibility and secure the future of your loved ones. If your family entirely depends upon you, then it is necessary for you to purchase adequate life insurance policy. You should also find out how much money your family may need to maintain their life if, by chance, you pass away all of a sudden.

3.Make your premium payments annually – It is better to make the premium payments on your insurance policy on yearly basis. Most of the insurers permit you to make monthly, quarterly, semi-annually or annual payments. It may sound suitable to pay your premiums on monthly basis but you’ll find that most of the insurance companies charge extra premium from you in that case. As such, opt for paying premium annually and save your hard-earned money.

4.Try to improve your health – If your health condition is not good, you will find it difficult to buy life insurance policy. The diseases such as diabetes, heart disease, high blood pressure are the ones that can avoid you from buying life insurance. But if you’re healthy or overweight, then you will have to pay high premium on your policy. It’s advisable that you maintain proper health before you purchase life insurance. This will enable you to save dollars on life insurance.

5.Purchase life insurance according to your need – A very good advantage of buying life insurance policy at the earliest possible is that you’ll have to pay low premium on your policy. The policy becomes more costly as your age increases. You will find that most of the insurance policies give you the alternative to renew your coverage before the term period of the policy ends without giving any medical exam.

6.Request for a reassessment in case your health improves – Once you have purchased a life insurance policy, you’ll be able to save money that you would, otherwise, had to pay on your own in case you face some unforeseen situation. You may have to pay high premium while buying life insurance due to health problem. However, if your health improves with time, you may ask your insurance company to reevaluate your rate so that you do not have to pay high premium anymore.

Apart from this, you should also try to acquire more coverage at low cost. The different life insurance policies give you different types of coverage. While buying life insurance, you should search for a policy that will provide you more coverage at low cost. This will help you save money on your policy and, at the same time, obtain more coverage thereby fulfilling your essential needs.

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