- Aged 17 to 29 – 35 x income.
- Aged 30 to 39 – 30 x income.
- Aged 40 to 49 – 25 x income.
- Aged 50 to 59 – 20 x income.
- Aged 60 to 71 – 15 x income.
This provider has an overall cover limit of £65mn.
What happens if a client changes employer?
It depends on the provider, so that is worth checking. However, many RLPs are now fully portable from employer to employer or employer to employee – provided there’s no break in the premiums.
When porting between employers, the plan remains relevant as life cover, but the owners and the trustees on the discretionary trust must change.
When porting to an employee, the policy switches into the employee’s name and becomes a personal protection plan. At that stage, the employers resign as trustees and an individual discretionary trust can be established instead.
If the plan has terminal illness cover – whereby a claim can be made if the life assured is diagnosed with a terminal illness and has a life expectancy of 12 months or less – this would cease to exist when the plan is ported to an employee.
Why should you consider advising on relevant life cover?
Most advisers’ clients include business owners or company directors who can protect their families through this type of protection.
RLPs do not fall under business protection, but for an adviser they can certainly open the door to get into business protection. From there you may find you are more easily able to get into key person and shareholder protection, which is a very lucrative yet untapped market.
Where can you learn more about relevant life cover?
Many providers run regular webinars with advisers to increase their knowledge and confidence in this area.
They also have a lot of support material on their adviser websites, including relevant life calculator tools that can calculate the potential tax savings.
Supporting the economy in challenging times
Small businesses are known to be the life-blood of any economy, and will be significantly challenged as inflation rises and markets become more volatile.
By helping your clients set up RLPs, you will not just be diversifying to protect the income of your own firm and those you employ, you will be putting your small business clients in a better position to meet the economic challenges ahead and enabling them to protect themselves, their employees – and their employees’ dependents – for years to come.
Richard Cooper is business development manager at The London Institute of Banking & Finance
