Awareness of relevant life plans (RLPs) has fallen by 24 per cent in the last two years, with only 28 per cent of businesses being aware of such policies in 2015, according to research from Legal & General.
A survey of nearly 850 business owners across various industries showed that awareness was higher two years previous, with 37 per cent of owners in 2013 knowing about RLPs.
Among the respondents who had heard of RLPs, 47 per cent had taken one out. Of these, 52 per cent had done so with a financial adviser.
Of the 53 per cent who had not taken out an RLP, 31 per cent said they “did not see the need for it” and 27 per cent said they “did not know enough about it”. But after an explanation of what an RLP is, only 12 per cent of these business owners said they either “definitely” or “probably” wouldn’t be interested in such a policy.
The research found that those businesses least likely to have heard of RLPs were not for profit organisations, small businesses and those in the property and education sectors.
Relevant life plans are death in service insurance policies suitable for directors wishing to provide their own individual benefits without taking out a scheme for all employees and high-earning employees where death in service does not form part of their lifetime allowance.
Legal & General head of specialist protection Richard Kateley says: “Relevant life plans are policies which many employees would like to be offered by their company, if only they knew about them. However our research shows that few know they exist and therefore are unaware of the benefits they could offer. Our research actually shows that there has been a reduction in this awareness among business owners over the last few years. Once business owners learn about the product, nearly half had taken one out, showing an impressive conversation rate and advisers have played a massive part in this awareness. But this just shows that both advisers and providers have much more work to do. It’s important that these policies are raised with business owners as clearly many of them are keen for such conversations, and they can often lead to wider discussions around business protection policies.”