11 Purdeys Way, Rochford, England, SS4 1ND
11 Purdeys Way, Rochford, England, SS4 1ND
Save up to 49% compared with personal life insurance. HMRC-approved, FCA-regulated — with free trust setup included for complete peace of mind
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Trusted by UK Directors Since 2008
Why pay for life cover personally when your company can? A Relevant Life Policy can save directors up to 49% in tax compared to a standard personal plan — a smarter, more efficient way to protect your family and business.
Relevant Life Insurance allows your limited company to pay for life cover rather than you personally.
It’s an HMRC-approved, tax-efficient policy designed to protect your family while helping your business save money.
By paying the premiums through your company, you could significantly reduce the real cost of cover compared with a personal plan.
In short, Relevant Life Cover is ideal for directors, business owners and key employees
who want to protect loved ones while keeping everything tax-smart and compliant.
It’s one of the simplest ways to make personal life insurance premiums a genuine business expense.
Company-paid Relevant Life Insurance gives business owners a smart way to offer personal protection through the company — providing peace of mind for directors and key staff while keeping things tax-efficient.
Rather than paying for cover personally, the business funds the policy — usually qualifying as an allowable business expense. The payout goes directly to the employee’s family via a discretionary trust if they pass away or are diagnosed with a terminal illness, keeping everything simple and compliant.
Because the policy is written under trust, it sits outside the company and personal estate — so it can pay out quickly and free from Income Tax or National Insurance. For directors, it’s one of the few ways to provide meaningful cover without increasing salary costs or triggering Benefit-in-Kind charges.
If you’d like a deeper dive into how the HMRC rules work in practice, take a look at our Relevant Life Insurance Taxation Guide. Or for a quick overview, download the PDF below.
Our Relevant Life Tax & Technical Guide explains, in plain English, how HMRC’s “wholly and exclusively” rules, corporation tax relief and Benefit-in-Kind exemptions apply — helping you understand exactly why this structure works so well for company directors.
“I’ve set up hundreds of Relevant Life Plans over the years, and directors are always surprised at how efficient they are. It’s one of those rare situations where doing the right thing for your family also makes perfect financial sense for your company.”
Here’s a simple example showing how paying for life cover through your limited company can cost significantly less than paying personally. The difference comes from corporation tax relief and avoiding income tax and National Insurance.
| Scenario | How It’s Paid | Calculation | Total Cost |
|---|---|---|---|
| Basic Rate Taxpayer (20%) | Paid personally from net income | £1,000 ÷ (1 - 0.20 Income Tax - 0.02 NI) = £1,228 | £1,228 |
| Higher Rate Taxpayer (40%) | Paid personally from net income | £1,000 ÷ (1 - 0.40 Income Tax - 0.02 NI) = £1,608 | £1,608 |
| Company Paid (Relevant Life) | Paid by company (tax-deductible expense) | £1,000 × (1 - 0.19 Corporation Tax relief) = £810 | £810 |
| Approximate Saving | – | Compared to personal life cover | Up to 49% less |
Example assumptions: £1,000 annual premium, 2% employee NI, 15% employer NI, and 19% corporation tax (small profits rate). For illustration only — actual savings will vary depending on company structure and tax position.
Why not try out our Relevant Life Calculator and see how much your business could save?
💡 Try the CalculatorTo be eligible for Relevant Life Insurance for directors and employees, they must meet the following criteria:
You can contact us today to get a quote and find the best policy for your company and employees.
Jody’s Insight on Eligibility
“A common misunderstanding I see is sole traders or traditional partners
thinking they can take out Relevant Life. Unfortunately, HMRC rules are clear —
you need to be an employee or director on PAYE. I’ve had cases where even
accountants assumed otherwise, so it’s always worth double-checking.”
A Relevant Life Policy is designed for employees of a limited company — including directors who take their income through PAYE. It can also cover both full-time and part-time staff, as long as they’re employed and on the payroll. That makes it ideal not only for directors, but also for senior employees whose contribution is critical to the business.
It does not apply to sole traders, traditional partnerships, or LLP members, as they’re not classed as employees for this purpose. This distinction often causes confusion, as many business owners assume all structures qualify — but HMRC rules tie eligibility specifically to PAYE employment status.
For directors, a Relevant Life Plan can be one of the most tax-efficient ways to provide personal life cover, since the company pays the premiums. Contractors operating through their own limited companies may also qualify if they’re paid as employees of that company — making it a popular choice for one-person setups and contractors where group life schemes aren’t available.
Learn more about:
Director Relevant Life Policies | Contractor Relevant Life Policies
“Many people assume Relevant Life is just for directors, but it can also protect key employees. I’ve arranged cover for senior managers and technical specialists whose loss would have a serious impact on their company. It’s about safeguarding the people who keep your business running.”
– Jody Pearmain, Director of My Key Finance Ltd
A Relevant Life Plan should always be written into a discretionary trust from the start. This ensures that any payout goes directly to the employee’s chosen beneficiaries — not the business — and keeps the benefit outside both company assets and the employee’s estate for Inheritance Tax (IHT) purposes.
Setting up the trust correctly helps:
In practice, every plan we arrange is placed into trust during the application stage — it’s not an optional extra. Without this, the plan can lose the key tax benefits that make Relevant Life Insurance so attractive.
Premiums must also meet HMRC’s “wholly and exclusively” test for allowable business expenses — meaning the policy must serve a genuine business purpose rather than personal cover.
It’s advisable to set a maximum amount of cover based on the employee’s total gross annual earnings and age. As a general guide, employees aged 17–29 can usually be insured for up to 35 times their annual remuneration, while those aged over 60 are typically limited to around 15 times their annual earnings.
The amount of cover for a Relevant Life plan should reflect the potential loss of income to the business if that employee were to pass away. This includes their salary, bonuses, benefits in kind, and regular dividends.
While a Relevant Life Plan is one of the most tax-efficient ways for businesses to provide life cover for directors and employees, other types of business protection insurance may suit different needs.
Designed to protect the business itself, this cover pays a lump sum to the company if a key person dies or becomes critically ill. The payout can help cover lost revenue, recruitment costs, loan repayments and other essential expenses.
Learn more about Key Man Insurance →
This policy ensures business continuity if a shareholder passes away. It provides funds for surviving shareholders to buy back shares and prevents ownership passing outside the business.
Learn more about Shareholder Protection →
Helps clear outstanding business loans or director’s guarantees if a key person dies or becomes critically ill, safeguarding both cash flow and credit standing.
Each option has different benefits depending on your company’s size, structure and financial commitments. If you’re unsure which route to take, we can compare them side-by-side to find the most cost-effective cover for your business.
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.
I had a great time working with My Key Man Insurance when I applied for the different insurances they offer.They were able to answer all of my questions quickly and effectively. I will recommend them to my friends and family.
It is so amazing working with this insurance company. i have had many unpleasant experiences with some insurances company in the past but working with Mykey insurance has really change my opinion and believe about insurance 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
What is the difference between the two policies and the best set up for your company.
As a contractor, managing your finances and securing protection for your loved ones is very important…
Both Keyman Insurance and Relevant Life Cover are types of life insurance that the business pays for….
While both offer the same kind of cover there are some differences well worth noting..
Clear, UK-specific answers from our director to help you decide if Relevant Life is right for your company and employees.
Death in Service is a group employee benefit that pays a lump sum if an employee dies while employed and typically ends when they leave the company.
Relevant Life is an individual, employer-funded life policy set up for a single employee (often a director) and written into trust for their beneficiaries. It is not a group scheme and will normally end if the employee leaves unless a new employer takes it over or the cover is replaced.
The employer is the policy owner and premium payer. The plan is placed into a discretionary trust at outset; on a valid claim, the trustees receive the proceeds for the beneficiaries.
No. It can cover any employee of a UK business. It’s commonly used for directors and senior employees in SMEs because it’s typically more tax-efficient than personal life cover.
Insurers set limits by age and total remuneration (salary plus regular dividends/benefits). Typical maximums fall between 15× and 25× remuneration depending on age band, but exact multiples vary by insurer and underwriting.
No. Under HMRC rules for Relevant Life, cover is for death (and usually terminal illness) only. Critical illness cover is not permitted on a Relevant Life plan.
Yes. Relevant Life policies are set up in a discretionary trust so benefits are normally outside the employee’s estate for Inheritance Tax and can be paid to the intended beneficiaries efficiently.
Information is general guidance for UK businesses. Always check the specific insurer’s terms and your tax position with your accountant. Policy features and financial limits vary by provider and underwriting.
