For intermediaries only. Relevant life. This presentation is for intermediaries only. It mustn t be distributed to, or relied on by, customers.

Transcription

1 For intermediaries only This presentation is for intermediaries only. It mustn t be distributed to, or relied on by, customers.

2 ``` Important information 2 The information in this presentation is based on our understanding of current legislation, taxation law and HM Revenue and Customs (HMRC) practice, which may change. The tax treatment depends on the individual circumstances of each client and may be subject to change in future. Trusts establish legal rights and entitlements and might have material financial and tax implications for the settlor, trustees and beneficiaries. Aegon UK isn t authorised to provide legal advice, so anyone setting up a trust would have to take their own legal advice, to make sure that it meets their requirements. Our trusts have been drafted for use by UK domiciled individuals.

3 ``` Contents Legislation and tax 3. Registered death-in-service schemes 4. Declaration of Trust for a Relevant Life policy 5. Leaving employment 6. Why Aegon? 7. Questions?

4 ``` Learning objectives 4 By the end of today s session you ll: understand what relevant life is and how it fits in the corporate protection market; be able to clearly articulate the legislative requirements surrounding relevant life policies and be able to identify potential clients and business opportunities; ; have a better understanding of the tax position for relevant life, and understand the options available should your client s employment circumstances change.

5 What is relevant life? 5 An employer-funded life protection policy for an employee. It can benefit from favourable tax treatment.

6 target markets 6 Small businesses and their owners. Certain high-earning employees. Members of group life schemes who want to top-up benefits.

7 Tax treatment and benefits of relevant life 7 A Relevant Life policy is defined in S393B(4) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). Can provide lump-sum death benefits only before age 75. No surrender value. Benefits payable to individual or charity only. Benefits must be capital in nature. Main purpose of policy must not be tax avoidance. Terminal illness benefit only payable while employee is still employed by employer.

8 Taxation of premiums and benefits Legislation and tax 8 policies are more tax efficient than ordinary life insurance policies that employers fund for an employee. No P11d benefit for employees. Employer premiums benefit from corporation tax or income tax relief. No tax implications for employers or employees when death or terminal illness payment is made.

9 tax calculator Legislation and tax 9 The employee NI rate applied is 12% for a basic rate taxpayer and 2% for a higher or additional rate taxpayer and the employer NI rate applied is 13.8%. This information is based on our understanding of current taxation law and HM Revenue & Customs (HMRC) practice, which may change.

10 vs registered death-inservice schemes Death-in-service registered schemes 10 Relevant life Registered deathin-service scheme Excepted group life Available for small companies Available on a single life No lifetime allowance trap Not subject to pension scheme rules Flexible For the policy to qualify as a relevant life policy, there are certain legislative conditions that must be met. Waiver of premium isn t available for relevant life.

11 - amount of cover 11 There are no limits to the level of cover set out in legislation, but we ll offer: Age Up to age 35 Ages 36 to 50 Ages 51 to 60 Ages 61 and over Income multiple 30 x income 25 x income 20 x income 15 x income

12 Our Declaration of Trust for a Relevant Life policy Declaration of Trust for a Relevant Life policy 12 Discretionary trust. Wide class of discretionary beneficiaries, including the employee. Flexible employer doesn t have to be a trustee.

13 Leaving employment Four options are available Leaving employment 13 Employee wants to transfer policy into their own name. Employee keeps the existing policy/trust in place. Takes over payments for the policy. New employer takes over the policy payments immediately. Employee takes over the policy payments for a while - then new employer steps in to take over the funding.

14 The process 14 Get a Business Protection illustration from the portals or direct from us. Level, increasing or decreasing life protection available. Use our Business Protection data capture form/application form. Underwriting. Declaration of Trust for a Relevant Life policy. A separate policy/application form for each insured person.

15 Why Aegon? We re protection specialists Executive income protection Terminal illness Financial underwriting limits Immediate cover facility (ICF) To age quotes Large sum assured (LSA) experience Health and wellbeing service Why Aegon? Key person replacement service Multiples of cover Simplified trust form Counsel opinion Continuation option 15 Price Pledge available

16 Support Why Aegon? 16 All literature and supporting information can be found on our website aegon.co.uk/protection Pre-submission underwriting helpline To speak to an underwriter about large benefit amounts call

17 Learning objectives 17 You should now: understand what relevant life is and how it fits in the corporate protection market; be able to clearly articulate the legislative requirements surrounding relevant life policies and be able to identify potential clients and business opportunities; have a better understanding of the tax position for relevant life, and understand the options available should your client s employment circumstances change.

18 Questions 18 Questions?

19 What is Relevant Life? Thank you 19 Catherine Trimble National Account Manager Visit or call (Monday to Friday 9am to 5.30pm) PROT381180/05/18 IP /17