What are the limitations with a relevant life policy?

The level of cover is subject to normal underwriting limits and so the maximum level of cover is restricted to up twenty times salary and remuneration package (including pension contributions).

However, the limits and definition of remuneration packages vary between insurers and independent financial advice must be sought.

The limits and definition of remuneration packages vary between insurers and independent financial advice must be sought.

Most insurers set a maximum level of cover at £10 million but unique cases above this level will be considered up to £100 million.

The relevant life policy must:

  • Only provide a lump sum death benefit payable before the age of 75.
  • Only be payable to an individual or a charity.
  • Benefits must be paid through a discretionary trust.
  • Beneficiaries are normally restricted to family members and dependents.

And must not:

  • Provide any other benefit.
  • Be capable of having a surrender value.
  • Be used mainly for the purpose of tax avoidance.

More on relevant life policies…

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One Response to What are the limitations with a relevant life policy?

  1. True those are some of the limitations. It must also be pointed our that each insurance company limits the sum assured to a multiple of remuneration. Insurers take into account basic plus dividends and this multiple varies by age from 10 times remuneration to 25 times in some cases.

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