29/03/2023

6 mins

Relevant Life Cover is one of the most tax-efficient ways of providing life insurance for an employee/director of a limited company.

The policy is paid for by your business and the premiums are HMRC approved as a tax-deductible business expense (providing you meet strict conditions when setting up the policy).
Premiums are not treated as a P11D benefit and don’t have any National Insurance implications for either the employee or the employer.
A claim is paid tax free should the policyholder die.

A company director in the 40% tax bracket could make savings of up to 50% when compared to a personal life insurance because of the tax-efficiency of policy.

You can use our relevant life calculator below to work out your exact savings based on your chosen premium.

Relevant Life Insurance Calculator

Calculate the tax savings you can make by taking out a company paid Relevant Life Insurance policy instead of a personal Life Insurance policy.

Relevant Life Policy Criteria & Eligibility

There are a number of conditions to ensure the policy passes the eligibility criteria for it’s tax status. The most important are:

It cannot include critical illness insurance
The policy must be set-up in a specific relevant life trust from inception.
It is not being set-up purely for tax avoidance.

Providing these conditions are met relevant life cover can be an incredibly tax-efficient term assurance. The individuals who can benefit the most include:

A director who currently uses their personal income to pay for life cover
A small business owner who wants to cover a single employee
Higher earners who are looking to avoid their death-in-service benefits becoming part of their lifetime allowance for pension purposes.

IMPORTANT NOTICE 🧐
As of the Spring budget 2023, the UK chancellor announced the abolition of the pension lifetime allowance (LTA). This came into effect from 6 April 2023.

It’s important to note however, the Labour party has announced that if they were to be elected, the allowance may be reintroduced in the future. If this occurs, we will update our records to reflect any changes. The information on this page is based on the LTA pre 6 April 2023.

Compare Relevant Life Quotes & Get Expert Advice

We are here to take the hassle out of setting up relevant life cover.

As expert advisers we will help you navigate HMRC rules. We’ll ensure you meet the eligibility criteria and will structure the policy correctly to take advantage of the available tax savings.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We know that our clients give so much to their businesses. They therefore deserve first class service when it comes protecting that business and their interest in it. Here are just a few reasons why it makes sense to talk to us:

There is no fee for our service
We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
You’ll speak to a dedicated expert from start to finish
We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
Claims support when you need it most.
We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐