Commentary

E1.1320 Qualifying whole life and term assurances

Personal and employment tax

E1.1320 Qualifying whole life and term assurances

Policies on which relief is due

E1.1320 Qualifying whole life and term assurances

This article explains the conditions which a whole life or term assurance policy must satisfy in order to be a qualifying policy. Life assurance premium relief is abolished in respect of all policies with effect from, broadly, 6 April 2015 (see E1.1300).

For the purposes of this article 'event' means 'death' or 'death or earlier disability'; a capital sum includes a series of capital sums; and a policy still secures a capital sum on death or disability even though it may vary with the misfortune1. The 'benefits specifically permitted' are certain benefits commonly found in life assurance policies, namely: benefits (including capital benefits) in case of a person's disability; the right to participate in profits; a guaranteed surrender value; an option to receive payments in the form of an annuity; the waiver of premiums in the case of a person's disability; and a provision for further insurance without proof of insurability2.

A policy securing a capital sum only on death (or on death or earlier disability) must satisfy the appropriate conditions3 set out in ICTA 1988, Sch 15, para 1(2), (3) or (4) if it is to be a qualifying policy for life assurance premium relief4.

If the policy covers the event whenever it happens (or during the life of a specified person)5:

  1.  

    (a)     there must be at least one premium payable every year either:

    1.  

      (i)     until the event (or, as the case may require, until the event or

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