What’s the Difference Between Personal Life Insurance and Relevant Life Cover?

Relevant Life Insurance and personal Life Insurance both achieve roughly the same end goal. Each pays out a lump sum if you pass away.

However, the way each policy achieves this goal — and the premiums you therefore pay — are different. Ultimately, the major difference between personal Life Insurance and Relevant Life Cover is who pays for it and the tax savings that you can make as a result.

What is Personal Life Insurance?

You pay for personal Life Insurance as an individual, from your own bank account. It pays out a lump sum to your family if you pass away.

What is Relevant Life Insurance?

Meanwhile, Relevant Life Insurance is paid for by a business or other eligible entity which employs staff.

A Relevant Life policy (RLP) is a tax-efficient Life Insurance. Contractors and directors of their own limited companies are among the most common policyholders.

However, it’s also available wherever there’s an employer / employee relationship. For example, this may be where a business is not large enough to offer a full Group Life Insurance scheme to staff.

With Relevant Life Cover, it’s incredibly tax-efficient. Premiums can be up to 49% cheaper than a personal policy once you take into account income tax, national insurance and corporation tax savings.

Key Differences Between RLP and Personal Life Cover

The below table provides an overview of the main policy differences between a personal life insurance policy and Relevant Life Cover.