Marriage, separation, a new baby or a relative becoming dependent on you can change what your household would need if you died. For a business owner or limited company contractor, a Relevant Life policy arranged years ago deserves another look when family circumstances change.
Relevant Life provides employer-paid life cover for an eligible employee, including a director, with a death claim paid through a trust for beneficiaries. It is family protection, not compensation for the business. [1] Reviewing it means checking both the insurance amount and the documents that guide who might benefit.
1. Revisit the amount your household needs
Start with the people relying on your income today. A new child may mean additional childcare costs and a longer period of financial support. A partner reducing their working hours, or an older relative needing help, can also change the picture.
List regular household spending, debts, childcare and education costs, and any support you provide outside your immediate household. Think about what could change if your income stopped, rather than simply multiplying your current salary.
Compare those needs with savings and existing life cover. Keep insurance intended for your family separate from protection intended to support the company. The same money cannot be assumed to solve both problems.
Take this picture to your adviser. Ask whether the amount and remaining policy term still fit. Any proposed change may require underwriting and confirmation of eligibility; an increase is not guaranteed.
2. Check the trust’s potential beneficiaries
The people you want to support and the people permitted to benefit under the trust are not necessarily identical. The deed sets out the potential beneficiaries and the trustees’ powers.
For example, some providers’ Relevant Life Plan Trusts can include definitions covering spouses, children including stepchildren, and additional beneficiaries.
After marriage, separation or the arrival of a child, ask a solicitor to check your actual deed. Do not assume separation automatically updates the trust or your wishes. Equally, do not assume adding a name to an informal note changes the permitted beneficiary classes.
Bring questions about a blended family, an unmarried partner or a dependent relative to that review. Avoid making legal changes based on a different insurer’s template.
3. Refresh nominations and recorded wishes
Find the latest nomination or expression of wishes held with your trust documents. Does it still reflect the people you would want the trustees to consider? Check names, relationships and any explanation of your family’s circumstances.
Ask how updated wishes should be recorded for your particular arrangement. Your solicitor can explain their legal effect and how they interact with the deed. A changed nomination alone does not increase the policy amount or necessarily change who is legally able to benefit.
4. Review trustees, not just names on a form
Check who currently acts as trustee, whether their contact details are current and whether they know where the documents are kept. A former partner remaining involved, a trustee who has died or someone who is no longer willing to act warrants legal advice.
Trustee requirements depend on the deed and the power being exercised. Some providers’ deeds require at least two trustees or a trust corporation for certain appointment and capital powers; that is not a universal rule for every trust decision.
5. Use a family review checklist
Before your appointments, gather:
- Your policy schedule, current cover amount and end date.
- The signed trust deed and any subsequent legal documents.
- Trustee names and current contact details.
- The latest nomination or expression of wishes.
- Details of marriage, separation, children and changed dependencies.
- Household costs, debts, savings and other life cover.
Your adviser reviews the insurance; your solicitor reviews legal changes to the trust. Keep the resulting documents together and tell the relevant people where to find them.
Contact Broadbench about reviewing your Relevant Life cover if your household has changed. Broadbench can discuss whether the insurance still suits your circumstances, subject to eligibility, underwriting and policy terms. [1]
*This article is general information, not legal advice or a personal insurance recommendation. Trust arrangements differ; obtain solicitor advice before changing legal documents.*
Sources
[1] Broadbench: Relevant Life Insurance
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