There are several kinds of insurance and life policies that are available for people around the globe. Each of the policies caters to specific needs and genre of people. A Zurich relevant life policy insures a person in case of death while he is in service of a company or industry. This is mostly for employees or managerial level people of the organizations and the premium or installment of the insurance is paid by the employer for the employee. The amount which gets collected during the tenure of his service is paid out in a lump sum manner if the employee dies or is diagnosed with some sort of terminal illness. It is not a part of the basic pay of the employee and is offered as a variable or benefits paid to the staff. The scheme is not suited for sole traders where there is no employer-employee relationship in the organization.
Tax benefits of Zurich relevant life policy —
There are several tax benefits of this policy for the employer as well as employee —
Employer benefits —
- As an organization, you can avail corporation tax benefit. But this benefit is provided only if the premiums are exclusively meant for business purposes.
- There is no sort of national insurance contributions that are to be paid on the policy in order to fund the relevant life policy.
Employee benefits —
- the employee would not need to pay or contribute to the national insurance contributions for the policy payments in order to pay the Relevant life policy.
- There will be no tax levied on the policy payments of the employee.
- The payments to this policy do not count towards the lifetime or annual pension allowances.
Rules of Zurich relevant life policy —
if you are an individual and want to qualify for relevant life policy then you must follow these rules —
- the policy provides the lump sum benefit of amount only if the person dies before the age of 75.
- the plan covers up the only death and does not include critical illness cover as such.
- The relevant life policy cover does not have a surrender value.
- If there is any sort of benefit which is payable to the policy then it must be payable to the charity or an individual.
The policy should be aimed at employee benefit and not for avoiding any sort of tax.