Relevant Life Plans – putting life cover on expenses just got easier with L&G’s new online trust

Relevant Life Plans can be a cost-effective way for SMEs to offer employees the benefits of a protection policy, but as our research shows, less than a third of the UK’s small and medium-sized businesses are aware of this important product.

Relevant Life Plans are a term assurance plan available to an employee if their employer is willing to pay for it, enabling them to provide a lump sum to employees should they be diagnosed with a terminal illness or pass away. To date, the plans have been mostly favoured by directors, as a means of their company paying for their family protection in a more tax efficient manner. On average, an RLP could save a business up to 50% per plan when compared to a standard life policy.

Trusts help to ensure the money from a customer’s life policy goes to the right people. And because the money paid out from a life insurance policy will not be part of the estate, this helps to reduce any potential Inheritance Tax bill – as well as ensuring there’s no risk of payments being held up with probate issues. It is essential that a relevant life plan is written in trust from outset

Now it’s easier than you think to put the policy in trust. Filling in forms, getting signatures – that’s a thing of the past.  Trusts have now been digitised, and it’s revolutionising the way advisers are setting them up.

Recently, Legal & General launched its new online trusts, making the whole process quicker and easier, not just for you but for your customers too.

Now your customer’s trust can be completed through the well-established Online Protection Connect (OLPC) system as part of the application.  And there’s no need for any signatures, removing any delays in the process of completing the trust. You’ll also find that a lot of the information you had to previously input has now pre-populated, leaving only a few extra details needed to complete the process. Simple and it’s also available for business and personal protection policies.

L&G research reinforces the important role advisers can play in raising awareness about protection products, given 73% of businesses were receptive to the idea of an RLP after it was explained to them. Another fact, if one was needed to demonstrate the power of advice, was that of those businesses that took out cover to protect their debt, 84% only did so after seeking advice. Advisers need to be proactive in this market and must continue to speak to SMEs, as many of them are either keen to have these conversations about protecting the future of their business or simply are not aware of the risks that they could be running. At Legal & General, we are focused on helping advisers do just that.

Relevant Life Plans remain one of the best ways of getting into the Business Protection market, but first we have to go out and talk to businesses to raise their awareness. We have also developed an online calculator which can show your clients the savings that an RLP can provide.

Legal & General believes this new online trust service will remove the complexity in creating a trust, making it much easier, saving time, paper work and chase up calls. Ultimately, it gives more time back for you to talk to more customers about the benefits of protection.

Now that’s a win, win for everyone!