Awareness of Relevant Life Plans (RLPs) among business owners has reduced by 24% in the last two years, with only 28% of businesses being aware of such policies in 2015, FTSE 100 insurer Legal & General has said.
Legal & General research, which surveyed nearly 850 business owners across various industries, showed that awareness was higher two years previous, with 37% of owners in 2013 knowing about RLPs.
Among the respondents who had heard of RLPs, 47% had taken one out. 52% of those who had taken an RLP out had done so with a financial adviser.
Of the 53% who had not taken out an RLP, 31% “did not see the need for it” and 27% said they “did not know enough about it”. However, after an explanation of what an RLP is, only 12% of these business owners said they either “definitely” or “probably” wouldn’t be interested in such a policy.
A Relevant Life Plan can be extremely valuable to both employer and employee as it is a term assurance plan which provides an individual death in service benefit for an employee. It is designed to pay a lump sum if the employee dies whilst employed during the length of the policy, and can also be used by company directors.
The research found that those businesses least likely to have heard of RLPs were Not for Profit, Small Businesses and those in the Property/Real Estate and Education sectors.
Richard Kateley, head of specialist protection at Legal & General, commented: “Relevant Life Plans are policies which many employees would like to be offered, but there is a commonly-held perception that they are complex products and so not a conversation many business owners have time to hold. Our research shows that there has been a reduction in awareness of these policies among business owners over the last few years, but also that nearly 50% of those who had heard of RLPs had taken one out. This shows that once business owners know more about the benefits offered by these products they are likely to want to take one out. It’s important therefore that business owners continue to consider RLPs for their employees by talking to their financial advisers, as they are ultimately to the benefit of the business in the long term.”