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 personally when your company can? A Relevant Life Policy can save up to 49% in tax versus a standard life plan. It just makes sense.
Relevant Life Insurance lets your limited company pay for life cover—not you personally.
It’s an HMRC-approved, tax-efficient policy that protects your family while helping your business save money.
In short, Relevant Life Cover is ideal for directors, business owners and key employees who want to protect loved ones
while keeping things tax-smart and compliant.
🔍 Compare Relevant Life Quotes (Takes 2 Minutes)
🔒 We never sell your information — you deal directly with
My Key Finance Ltd, an FCA-authorised business protection specialist.
A Relevant Life Plan is a business-paid life insurance policy that pays a lump sum to your chosen beneficiaries if you die
while employed. It’s set up under a discretionary trust, keeping the benefit outside your estate for inheritance tax purposes.
This type of policy suits directors and small businesses that want cost-effective, compliant life cover for one or more employees
without needing a full group scheme. Policies are portable, meaning you can take them with you if you move companies or become self-employed.
Relevant Life Insurance allows your company to provide life cover for directors and employees in a highly tax-efficient way — protecting their families while delivering valuable business benefits.
If the insured person dies or is diagnosed with a terminal illness while employed by your company, their beneficiaries receive a lump sum payout through a discretionary trust. This ensures the benefit is paid directly to the family, not the business or HMRC.
Most plans include cover for death and terminal illness as standard. Some providers, such as AVIVA, also offer an optional serious illness version for added protection.
Premiums are usually classed as an allowable business expense for corporation tax purposes, and there’s no Benefit-in-Kind charge for the employee or director. That means your company can offer genuine protection while saving up to 49% compared with a personal life insurance policy — all fully compliant with HMRC rules.
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Company-paid Relevant Life Insurance offers a powerful blend of protection and tax efficiency for both employers and employees.
It allows businesses to fund life cover for directors and key staff through the company — usually qualifying as an allowable business expense — while the benefit is paid tax-free to the family if the insured person dies or is diagnosed with a terminal illness.
Unlike traditional life insurance, Relevant Life cover isn’t treated as a benefit in kind, so the insured employee or director won’t need to pay Income Tax or National Insurance contributions. For a detailed insight into the taxation, check out our Relevant Life Insurance Taxation Guide. Or for a quick technical guide, please download our PDF below.
Download our Relevant Life Tax & Technical Guide for directors and advisers. It explains how HMRC’s “wholly and exclusively” rules, Benefit-in-Kind exemptions, and corporation tax relief apply to Relevant Life policies — all in plain English.
“In practice, the biggest advantage I see for directors is the tax efficiency. Instead of paying for personal life insurance from post-tax income, the company can fund a Relevant Life Plan and save thousands over the life of the policy.”
The example below compares the effective annual cost of £1,000 of life cover when paid personally versus through a company as a Relevant Life Plan. Figures are illustrative and rounded for simplicity.
| Scenario | Personal Life Cover (Paid Personally) | Relevant Life Plan (Company Paid) |
|---|---|---|
| Basic Rate Taxpayer (20%) | £1,228 total annual cost | £810 (after 19% corporation tax relief) |
| Higher Rate Taxpayer (40%) | £1,608 total annual cost | £810 (after 19% corporation tax relief) |
| Approx. Saving | – | Up to 50% less |
Example assumptions: £1,000 annual premium, 2% employee NI, 15% employer NI, and 19% corporation tax (small profits rate). For illustration only. Individual circumstances and tax rates vary.
To 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.
“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 company directors who are on the payroll. Both full-time and part-time staff can be covered, provided they are employed and paid through PAYE. This makes it a valuable option not just for directors, but also for senior employees whose contribution is vital to the business.
It does not apply to sole traders, traditional partnerships, or LLP members, as they are not classed as employees for this purpose. This distinction matters, because many business owners assume all structures qualify — but the eligibility rules are tied specifically to PAYE employment status.
For directors, a Relevant Life Plan can be one of the most tax-efficient ways to provide life cover, since the company pays the premiums. Contractors operating through their own limited companies may also qualify if they are paid as employees of that company. This makes it an attractive choice for one-person companies and contractor setups 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 also protects key employees. I’ve arranged cover for senior managers and technical specialists whose loss would have a serious impact on their business. It’s about protecting the people who keep your company 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.
To get the right protection for your company and staff, speak to My Key Man Insurance. As a whole-of-market, FCA-authorised broker, we compare policies from leading UK insurers to find cover that fits your business needs and budget.
If you’re unsure whether a Relevant Life Policy or a personal life insurance plan is the better route, our specialists will explain the tax differences and help you decide what’s most efficient for your situation.
Quote & Apply Online in 3 Simple Steps.
Submit the details of the key member of staff
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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.
