An Overview of Relevant Life Legislation

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There are certain terms and conditions that regulate relevant life insurance policies and they are collectively known as relevant life legislation. This policy is a single-life, death in service benefit policy designed to cover an employee by the employer and carries a whole lot of tax benefits for the employer.

Relevant Life Legislation: An Overview

Subsection 393B (4) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) delineates a ‘relevant life policy’ as:

  1. An exclusive group life policy as laid down u/s 480 of the Income Tax (Trading and Other Income) Act 2005
  2. A life insurance policy, the terms and conditions of which support the insured person’s beneficiaries through benefits in the event of his/her death, and with regard to which: (i) Clause A u/s 481 of the Act would be fulfilled if paragraph (a) in that clause denotes the death, in any situation or excluding particular situations, of that person (instead of the expiry in any situation of each of the persons who are covered with the plan) and if the clause did not incorporate paragraph (b), and ii) clauses C and D under that section and clauses A and C u/s 482 of the Act are fulfilled, or
  3. A life insurance policy that will fall inside the purview of paragraph (a) or (b) only because of the reality that it offers a payout which is an exempted payout under or on account of paragraph (a), (b) or (d) of subsection (3) of section 393B of the Income Tax (Earnings and Pensions) Act 2003.

Consequently, the criteria that have to be fulfilled if a policy is to be regarded a relevant life policy in the ‘single life’ class laid down in (b) are as follows:

Clause A u/s 481 of the Income Tax (Trading and Other Income) Act 2005 (‘ITTOIA’) –  “under the terms of the policy a sum or other benefit of a capital nature is payable or arises on the death in any circumstances of [the individual] insured under the policy who dies under an age specified in the policy that does not exceed 75.”

Clause C u/s 481 – “the policy does not have, and is not capable of having, on any day:

(a)  A surrender value that exceeds the proportion of the amount of premiums paid which, on a time apportionment, is referable to the unexpired paid-up period beginning with the day, or

(b)  If there is no such period, any surrender value.”

Clause D u/s 481 – “no sums or other benefits may be paid or conferred under the policy, except as mentioned in condition A or C”.

Clause A u/s 482 of Income Tax (Trading and Other Income) Act – “any sums payable or other benefits arising under the policy must (whether directly or indirectly) be paid to or for, or conferred on, or applied at the direction of:

(a) An individual or charity beneficially entitled to them, or

(b) A trustee or other person acting in a fiduciary capacity who will secure that the sums or other benefits are paid to or for or conferred on, or applied in favour of, an individual or charity beneficially.”

Clause C u/s 482 – “a tax avoidance purpose is not the main purpose, or one of the main purposes, for which a person is at any time:

(a) The holder, or one of the holders, of the policy, or

(b) The person, or one of the persons, beneficially entitled under the policy.”


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PPI Guide: How to Make an Effective PPI Claim

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A customer with a mis sold PPI actually worth £2,750 lost to their banks. Imagine if you have multiple mis sold PPI on multiple financing, that is going to really be a big problem. Making a PPI claim is actually easy, but you’ll need to take note of the following.

1. Proof of Purchase

Most banks reject claims that don’t have any proof that the customer purchased the insurance from their bank. Be sure to keep at least one receipt that has the address of the bank as well as an official receipt number to enable them to check into their records that you have purchased the insurance.

2. Knowing More About the Mis Selling

In proving that you were mis sold the insurance policy, knowing how your financial adviser has mis sold you the insurance is one thing. The Financial Services Authority may prove that around 75% of most claims state that customers purchased the insurance on account of their financial adviser’s statement, but you need to know why or how.

3. Proving That You’re Mis Sold

If through advice, personal statement or urging from your financial adviser that you purchased the PPI, you need to prove through evidence that you were mis sold. A medical record dating a few days before signing up for the insurance or your birthdate and last employment date could help prove that you were already unemployed, self-employed, retired or already having a pre-existing medical condition proves that you’re mis sold PPI.

4. Help from a Claims Management Company

A claims management company, such as PPI Claim Co can help you understand more about claiming. Again, if you have multiple claims, these are certainly the people you can ask help from. They can also work on your claim under a no win no fee basis.

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Financial Ombudsman Struggles With Mis Sold PPI

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On a daily basis, the Financial Ombudsman Service (FOS), UK’s independent organisation that helps resolve issues between customers and banks, is handling thousands of complaints against financial institutions. To date, it is continually receiving thousands of complaints just for PPI policies alone.

The FOS states that the most complained about institutions are both Barclays and Lloyds Banking Group. Barclays has received 19,000 worth of complaints pertaining to their financial products, of which 90% are for mis sold payment protection insurance. Lloyds has over 20,000 in customer complaints with 94% percent of the complaints relating to mis sold PPI.

Both banks, along with other top banks such as HSBC and RBS, have set aside a £9bn compensation package for the entire United Kingdom. Customers with successful claims have been given half the amount of this package.

PPI is designed to provide repayments for any customer’s financial commitments should they face financial difficulty having been laid off work, sick or had an accident. While these are sold along with financial products depending on one’s credit scores, the exclusions of the policies have never been highlighted to customers. The high court has ordered UK banks to refund PPI to their customers instantly.

However, financial institutions and other banks continue to reject claims from customers. The FOS reports that these banks may still not have enough resources to provide the refunds to customers, based on their interactions and complaints they forward to such banks.

PPI is the biggest financial mess banks and financiers have committed against their customers swindling tens of thousands of pounds for an insurance policy that they are not sure they are eligible for. To ensure that customers make a successful PPI claim, it is advised that they seek help from claims experts to ensure their success.

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PPI Mis Selling Dents £3000 on Customers

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PPI or payment protection insurance has cost customers £3000 on average. Being mis sold, this amount of money is lost to banks as millions of borrowers are contacting their banks to reclaim PPI. Commission-based financial advisers are clearly to blame for the fiasco. They have failed to take into consideration the qualification of their customers regarding the terms and conditions of the insurance policy. Today, banks have reached £5 billion in compensating UK citizens who were mis sold PPI..

Usually, customers who are mis sold PPI purchase the insurance policy as per advice of their financial advisers. Playing with the trust of their customers, financial advisers gain more commission by selling the insurances. In 2011 alone, the banks have paid out a total of £1.9 billion for the compensation of mis sold customers. This was also the year the Financial Services Authority (FSA) had established the new ppi reclaiming guidelines for the benefit of customers.

The consumer group Which? has extended negotiations with the top PPI providers and banks in the country to allow customer to make a claim directly to them. The FSA states that this increases the speed of reclaiming PPI by 10% in the whole country. Given their call to banks to correspond with customers potentially mis sold PPI, the number of 10.8 million claimants who haven’t made a claim yet may be reduced quickly this year.

Making a PPI claim might take much time and effort from a claimant. Claimants who have hectic schedules or have no time to make a claim can contact to consult with claims experts to provide them help and expertise in getting back all their refunds from a PPI claim. They can also have the claims experts make the claim on their behalf if they find no time in making their claims any time soon.

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Insurance or Investment?: Factors to Consider

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Insurance and investments are not the same thing. With insurance, you save and grow money for the sole reason of having security over certain situations that will usually incur financial problems. With investments, you can save money and take it out for any reason at all. However, each one has its own advantages and disadvantages.

1. Investments: You Reap What You Sow

The yield of an investment in an insurance company depends on the amount of money you deposit regularly on your account. An investment is a vehicle that allows you to generate money over time. However, while the growth for most investments are uniform, the amount of money you get depends on the amount you initially place. You also have the privilege of depositing ‘top-ups’ to increase your annual yield or increase your premiums yearly.

2. Insurances: Regular Protection

Insurances allow you to pay for their premiums regularly with a uniform amount. However, the increases you provide only decreases the time needed to pay for the entire insurance amount. Unlike investments, the initial amount you place guarantees a set of benefits for yourself. Investment amounts depend on the initial amount you deposited.

3. Investments: You Can Get Money Any Time

With investments, you can get the amount of money due to you, including everything with taxes at any time. While your financial adviser might advise against it, you have the right to take out part or the entirety of your money.

4. Insurances: Only During Circumstances

Insurances protect you from events that may have you financial problems. Once the event has happened, you’ll need to show proof that the event has passed. For example, if you have a medical problem, the insurance provides you a hospital with full benefits, if that is the premium you’ve paid for.

5. Investments: Provides you Insurances

Your regular repayments for an investment account and your increasing premiums allows you to receive protection insurances, which are usually added on top of your monthly fees. You can take advantage of these insurances. Paying for them with your investment is also possible.

6. Insurances: Lifetime Upgrades Are Possible

If you’ve taken out an insurance policy and have been using it regularly, at a certain point in your repayment term, you can be asked to upgrade to a lifetime length of protection. This allows you to increase your repayments for a certain period of time while ensuring that you have protection for the rest of your life for a certain circumstance.

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Great Tips For Choosing Insurance Plans

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If you’re a young professional, or you’re currently looking for a formidable insurance policy for the future, it can be quite difficult to decide. Today, with so many insurance companies existing all over the world, which one can you truly trust? You might have conferred with their financial advisers, but still you find it difficult to decide. You know that you’re about to place much money in purchasing an insurance plan, which is why you should consider the following before you decide to purchase one.

1. Company Background

Purchasing an insurance is just like investing. They take your money and make it grow depending on their company’s rating in the world market. Having knowledge about the insurance company’s background is very important. Don’t believe what the financial adviser tells you; prove it to yourself. Do a bit of background research. Sometimes, you might find even some of your friends in the past who may have been working with the insurance company at an earlier date.

Knowing about the company’s background helps you gauge whether your money is in good hands and if their company is directly affected by economic climates easily. Most insurance companies based on countries with weak economies can have its value changing easily over time. However, a company founded on a country with a very strong economy can easily outlast any economic problem and retain bond value.

2. Payment Plans

Most insurance allow you to pay monthly, quarterly, bi-annually or annually. Manage your finances first. If you find that you can manage better with one of such payment methods, ask if you can use such payment method to finance your insurance. If they do not offer the payment method you find ideal, decide against the offer and find an insurance company who can meet your terms.

3. Requirements

Always ask the financial adviser for the insurance requirements. Most people do not know they were ineligible for their insurance because they did not ask for the requirements. Some financial advisers forget to explain about the insurance’s requirements. You might be paying much money for an insurance that you cannot actually use in the future if you don’t comply early with its requirements.

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