The cost of a Directors Life Insurance policy varies according to several factors, including:
11 Purdeys Way, Rochford, England, SS4 1ND
11 Purdeys Way, Rochford, England, SS4 1ND
Director Life Insurance — Tax-Efficient Cover for Directors & Employees
Pay for your personal life insurance through your limited company and make it fully tax-deductible, saving up to 49% against personal cover.
Business Protection Experts
Independent UK Broker
Trusted by UK Directors Since 2008
Trusted by UK Directors Since 2008
Director Life Insurance is an HMRC-approved, tax-efficient life cover policy paid for by your company. It’s designed specifically for directors and employees of limited companies who want personal protection delivered in the most cost-effective way.
Unlike a personal life policy that you fund from your own after-tax income, Director Life Insurance premiums are paid by the business and are usually corporation-tax-deductible. The cover is not classed as a benefit-in-kind, meaning there’s no income tax or National Insurance to pay.
Each policy is written into a discretionary trust, ensuring that any payout goes directly to your chosen beneficiaries — quickly and tax-free.
Both personal and director life policies provide a lump-sum payout on death, but a director policy is tailored for those employed by a business, offering savings of up to 49% compared with paying for cover personally.
Use our Relevant Life Calculator to see how much your company could save with Director Life Insurance.
Director’s Life Insurance — often referred to as Relevant Life Insurance — is a smart, HMRC-approved way for company directors and business owners to provide personal life cover through their business in a fully tax-efficient manner.
Instead of paying for life insurance from your own taxed income, your limited company pays the premiums. These are typically classed as an allowable business expense, meaning you can claim corporation-tax relief and avoid any benefit-in-kind (P11D) charges.
If a claim ever arises, the payout goes directly to your chosen beneficiaries — tax-free and outside your estate. It’s a simple, compliant, and highly cost-effective way to protect your family while reducing the cost to your business.
In short, Director Life Insurance lets you keep full personal cover while saving up to 49% compared with a standard personal policy — a win for both your company and your loved ones.
Key Person Insurance is a vital form of business protection. It ensures your company remains financially secure if…
Relevant Life Insurance is a form of tax-efficient life insurance for directors and employees…
Building a business is hard work and takes time and energy. Business owners know they can always rely…
Private health insurance in the UK provides cover for medical expenses incurred…
Policies for company directors’ life insurance work in a similar way to traditional life insurance but with one key difference — they’re structured for tax efficiency and business ownership.
| Feature | Director Life Insurance | Personal Life Insurance |
|---|---|---|
| Who Pays? | Paid by the company | Paid personally |
| Tax Treatment | Usually corporation-tax-deductible | Paid from after-tax income |
| Benefit-in-Kind | None – P11D-exempt | Not applicable |
| Payout | Tax-free to beneficiaries | Usually tax-free, but may count towards inheritance tax |
| Policy Ownership | Owned by the company, held in a trust | Owned by the individual |
| Eligibility | Employees and directors of a limited company | Anyone applying personally |
This setup allows businesses to offer valuable personal protection to directors or key employees, without the tax burden that comes from traditional life insurance.
Director Life Insurance provides peace of mind by ensuring your family receives a lump-sum payout if you pass away during the policy term. The business pays the premiums, and the policy is written into a discretionary trust for your chosen beneficiaries.
Because the company owns and funds the policy, the premiums are normally treated as a business expense and can qualify for corporation-tax relief. At the same time, the director avoids any personal income-tax or National-Insurance liability.
In the event of a claim, the insurer pays the benefit directly to the trust — tax-free and outside the estate — ensuring quick access for your family or dependants. Some policies can also include terminal or critical illness cover for additional protection.
It’s an efficient way to provide individual life cover through the company while reducing personal costs and protecting what matters most.
“If you’re not sure whether your business qualifies for this type of cover, it only takes a minute to check. Most limited companies and salaried directors do — and the savings are often far more than people expect.”
Director Life Insurance provides a tax-efficient lump-sum payout if the insured director dies during the term of the policy. This payout is paid to the beneficiaries through a trust, ensuring it’s received quickly and tax-free.
Most policies also include terminal illness cover, meaning a payout can be made early if the insured is diagnosed with a life-limiting condition and expected to live less than 12 months. Some insurers also offer the option to add critical illness cover for additional protection against serious medical conditions such as cancer, heart attack, or stroke.
Policies are generally offered on a level-term basis, where the cover amount stays the same for the entire policy term. However, you can also choose:
This flexibility allows directors to tailor their life cover to suit both personal and business needs — providing financial security for their family, business partners, or key employees.
While not essential, having Director Life Insurance is a smart financial move for both the company and the individual director. It’s especially valuable for those who don’t have access to a large group life insurance scheme because of their company’s limited size.
This type of policy ensures your loved ones receive a tax-free lump sum if you die or are diagnosed with a terminal illness, while your business can still claim the premiums as a corporation-tax-deductible expense.
Director Life Cover is ideal for:
Many directors also pair their cover with other protection policies such as Private Health Insurance and Shareholder Protection for complete peace of mind.
The amount of Director Life Insurance cover you can take out depends on your age, income, and the insurer’s criteria. Each provider sets limits as a multiple of your total remuneration (salary plus dividends). These limits are designed to keep cover realistic and HMRC-compliant.
Here’s a general guide to what most insurers allow:
These figures can vary slightly between insurers, so it’s worth comparing quotes across the market. Some providers may offer higher multiples or additional options such as critical illness cover or increasing benefit plans to protect against inflation.
If you’d like to find out exactly how much cover your business qualifies for, our specialists can compare every major UK provider and show you the most tax-efficient options for your company.
Finding the best value on Director Life Insurance isn’t just about choosing the lowest price — it’s about securing the right policy structure, tax efficiency, and trusted protection for your company and family. Here’s how to make sure you’re getting the most out of your cover:
As a specialist business protection broker established in 2008, we’ve helped thousands of UK directors arrange life cover that’s both compliant and cost-efficient. We’ll handle everything — from quote comparison to trust setup — so you can focus on running your business.
The cost of a Directors Life Insurance policy varies according to several factors, including:
Most directors can save money on cover by opting for a Directors Life Policy rather than personal cover due to tax savings. Small businesses can claim life cover as a business expense, which offers access to 20% corporation tax relief.
To illustrate the potential savings, take the example of a personal life policy, which costs £120 per month. Buying a personal policy means using your own money, on which you would already have paid national insurance and income tax. If you pay the high rate of tax on your earnings, this means you would need to earn £226.42 to pay for your £120 premium. If you have a Director Life Policy, you won’t pay income tax or national insurance contributions on your policy, and you’ll be eligible for corporation tax relief. Instead of earning over £220, you’d need to earn £97.20 for the same plan.
The pension lifetime allowance is the maximum amount you can save in your pension pot without paying tax. If you exceed the limit in your pension savings, you will pay tax on the additional funds (the current rate is 55% for a lump sum payment and 25% for cash withdrawals and pension payments). The pension lifetime allowance for 2022/2023 is £1,073,100. The limit has been frozen until 2025/2026 (source).
One major advantage of a director’s life insurance policy is that it doesn’t impact the pension lifetime allowance. The policy does not count towards the pension pot, meaning that it can help directors avoid paying tax on their pension savings.
You can read more here about pension schemes and whether your business would benefit.
Applying for company Directors Life Insurance cover is similar to applying for a personal life policy. Once you have researched plans and providers, the next step is to fill in the application form. This can be done quickly and easily online. You will be asked to provide information to get a quote for your cover. You’ll need to provide details about the medical history and lifestyle of the insured personnel.
Examples of questions you will be asked answer include:
Insurance providers will use the information you give them to figure out the premium. If you are happy with the quote and you wish to go ahead, you’ll need to complete the policy application form, which includes adding the names of the policy beneficiaries. If the company is satisfied that you meet the criteria, they will approve your application, and your cover will start on the agreed date. Your business will pay the agreed monthly or annual fee for the duration of the term.
If you run a limited company, and you’re thinking about getting life cover, there are two main options. You can buy a Personal Life Policy or take out Directors Life Insurance. Director life policies offer a raft of benefits for small businesses.
Benefits include:
Getting Life Insurance for company directors also benefits the business itself. The cover is an attractive benefit for prospective directors and can help attract them to the position.
Quote & Apply Online in 3 Simple Steps.
Submit the details of the key member of staff
Compare the quotes online
Fill out the application and get covered today.
Jody was very helpful in explaining the options and I thoroughly recommend his company
We received a wonderful service from mykeyman and will be using them again. The service and product knowledge from team is excellent. Everything was made easy to understand. The price was the best we found too.
The standard of service was first class. They kept me up to date with progress on my Relevant Life Policy, followed up promptly following delays caused by my medical practice being slow in compiling reports, and responded instantly and clearly to any questions I had.
Jody was very helpful in explaining the options and I thoroughly recommend his company
The standard of service was first class. They kept me up to date with progress on my Relevant Life Policy, followed up promptly following delays caused by my medical practice being slow in compiling reports, and responded instantly and clearly to any questions I had.
We received a wonderful service from mykeyman and will be using them again. The service and product knowledge from team is excellent. Everything was made easy to understand. The price was the best we found too.
Jody was very helpful in explaining the options and I thoroughly recommend his company
Key man insurance taxation rules have changed in 2024, affecting how businesses manage this important coverage. Here’s what you need to know about the latest updates.
Key man insurance is crucial for protecting your business from the unexpected loss of key personnel. Here are 5 reasons why every company should consider this essential cover.
Wondering how much cover your business needs? Our calculator makes it easy to find the right coverage for your key employees.
Aviva Relevant Life Insurance Review Get My Instant Quotes Start saving money on life insurance today When it comes to Relevant Life Insurance…
A benefit in kind, also known as a BiK, is a product or service, which is given to a company employee free of charge or at a heavily discounted rate. All employers are legally required to disclose benefits in kind. Benefits in kind are sometimes known as fringe benefits and they are usually perks that are not included in the employee’s salary or employee benefits package.
Director’s life insurance is not classed as a P11D benefit in kind by HMRC. This means that company bosses do not have to pay additional income tax or National Insurance contributions on them.
Director’s life insurance cover is tax deductible. This type of policy is classed as a business expense. When you file your taxes, you can deduct the policy cost, reducing your corporation tax outgoings. It’s deductible primarily because it’s considered a legitimate business expense.
Here’s a concise explanation:
The UK tax authorities (HMRC) recognise it as an allowable business expense because they’re viewed as a form of employee benefit that serves a clear business purpose. By providing financial protection for key employees and their families, the policy helps the company attract and retain valuable staff. This, in turn, contributes to the stability and continuity of the business.
Since the policy is taken out to benefit the business (by protecting its crucial human assets) rather than for personal gain, the premiums can be treated as a business expense. This allows the company to deduct the cost from its taxable profits, effectively reducing its corporation tax liability.
You can check out our relevant life insurance taxation page for more details on how director’s life insurance is taxed.
It depends on the cover you take out. The more comprehensive the cover, the higher the premiums will be. You can contact us to discuss a quote for your company’s needs.
Most UK life providers offer directors cover. Examples including; IG, Aviva, Legal & General, Scottish Widows, Zurich, Liverpool Victoria (LV), Vitality, Royal London and Aegon.
To find life cover for company directors, it’s beneficial to research online, use search engines, read reviews and contact companies to compare quotes and get prices.
The main areas of distinction between personal and director life insurance are their intended uses and tax implications. Director life insurance is a company-paid policy designed for employees and directors of businesses, offering tax benefits. Premiums are typically tax-deductible for the company and not treated as a benefit-in-kind for the insured. The payout is usually tax-free for beneficiaries.
In contrast, a personal policy is taken out by individuals to protect their families, with premiums paid from after-tax income with no corporate tax advantages. While both provide a payout on death, director life policy is more closely tied to one’s role in a business, whereas personal life insurance offers broader coverage regardless of employment status.
Use our relevant life calculator to see the difference in premiums and what can be saved by using director life insurance.
Critical illness is not available with director life insurance plans, as it is not an approved tax benefit, according to HMRC. If you have life cover through a limited company, you may be covered if you are diagnosed with a terminal illness and you are expected to live for less than 12 months. However, AVIVA do offer a significant illness option which is a scaled-down version of critical illness.
Director, My Key Finance Ltd – FCA Regulated (FRN 628996)
“After 15 years advising directors, I still meet many who pay personally for life cover when it could be funded through their company — saving up to half the cost. This page explains exactly how to do it the right way.”
Connect on LinkedIn
Director’s Comment
“When I explain this to directors for the first time, they’re often surprised by the savings. Paying for life cover through your company is HMRC-approved and avoids a P11D charge — one of the simplest ways to protect your family and keep more of your income.”
— Jody Pearmain, Director of My Key Finance Ltd · Connect on LinkedIn