Who is it for?
Life Cover through the company is suitable for both a director of a company or an employee. You can also avail of it if you are a member of a group occupational pension scheme and your employer has set up a group AVC scheme.
Life Cover through the company (also known as Executive Pension Term Insurance) has been approved under Section 785 of the Taxes Consolidation Act, 1997.
Premiums paid into Life Cover through the Company are eligible for tax relief at the appropriate corporate rate, subject to certain limits.
Features of Life Cover
Life cover through the company can be taken up to normal retirement age of maximum age of 70. The policy must be set up under trust where typically the employer will act as a trustee.
If you are a member of occupational pension schemes, the maximum amount of life cover that is allowed by the Revenue Commissioners is four times your salary plus an allowance for dependents’ pension.
There are no Benefit-in-Kind implications for the policy holder (life insured) if premiums are paid by a company on your behalf.
The expiry date or term of your Executive Pension Term insurance plan cannot go beyond your normal retirement age (NRA) of your company pension plan. In other words the term of the life cover must correspond to the normal retirement age of your company (occupational) pension scheme. Also, if you leave employment earlier than your NRA, the cover will cease at that date.
What are the restrictions?
Due to the generous tax relief available on premiums, The Revenue Commissioners have imposed a number of restrictions:
• The policy can not be used as security for a loan and can not be assigned.
• Can not be taken out in a joint or dual life capacity i.e. policy can only be taken out in a single life capacity.