Relevant Life Insurance

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Relevant Life Insurance Key man Insurance UK

What is Relevant Life Insurance?

Relevant Life Insurance is a company-owned insurance policy which allows
businesses to offer life insurance to employees within a business.

 

If you are the owner of a small company or one of the company directors, it’s certainly worth thinking about even if it’s just for yourself.

 

With Relevant Life Assurance, you can save up to 50% against the equivalent personal life insurance. So both the business and the employee benefit.

 

So, if you are a company director looking to take out a life insurance policy, why would you ignore relevant life cover?

 

Try out our relevant life calculator and work out how much you can save. Alternatively, why not just compare relevant life insurance quotes online?

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Who can take out a Relevant Life Policy?

Its typically available to small businesses or
employers who want to provide life insurance for their employees.

It is commonly used by businesses that may not have enough employees to establish a traditional group life insurance scheme. Eligibility for Relevant Life Insurance may vary depending on the insurance provider and local regulations, but generally, the following criteria apply:

Advantages of Relevant Life Cover

Offering Tax Efficient Relevant Life Cover to your employees is great for
employee retention!

There are fantastic advantages to using a relevant life plan due to its tax efficiency. But that’s not all. Have you considered how much your employees will appreciate having a death-in-service benefit? A policy which will pay out a tax-free lump sum of money to their loved ones in the event of their death. Offering your employees financial protection for their families will be greatly appreciated and will help generate a much better working relationship between the company and its employees.
Relevant Life Insurance Key man Insurance UK
The advantages stretch beyond the bottom line.
“Studies have shown that business owners who show care towards their employees and provide perks have lower staff turnover and also benefit from higher productivity.”
Relevant Life Plans functions as both: it functions as part of a company’s wellness program and also offers employees an incentive to stay.

Tax Treatment

A tax efficient life insurance?
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A discretionary trust forms the basis of the policy. Without a trust in place, the policy would not be set up correctly and the tax benefits would not apply. This is quite easy to do and with most life insurance providers, we can set this up for you online.

Is a relevant life policy a benefit in kind?

HMRC will treat the premiums as an allowable business expense which means they are not included as a P11D benefit in kind. This means the premiums and benefits usually qualify for relief on the:

Of course, rules on taxation could change. But for now, you are looking at huge savings against normal life plans in a tax-efficient way. You can read more details on relevant life HMRC tax treatment here

Who Owns A Relevant Life Policy?

The policy is typically owned by the business or employer on behalf of the
covered employee.

The business or employer pays the premiums for the policy and retains ownership of the policy throughout its term.

As the policy owner, the business or employer has certain rights and responsibilities, which may include:

While the business or employer typically owns the policy, the designated beneficiaries are the individuals or entities who will receive the death benefit in the event of the covered employee’s death.

What is the difference between Key Person Insurance and Relevant Life Cover?

Key Person Insurance and Relevant Life Cover are two different types of life insurance policies that serve different purposes in the context of business insurance.

Key Person Insurance is a policy that a business or employer can take out on the life of a key person within the organization. This key person is usually a key employee or business owner who is critical to the success and continuity of the business. The purpose of Key Person Insurance is to protect the business from financial loss in the event of the key person’s death or disability.

Relevant Life Cover is a type of life insurance policy that is designed for small businesses or employers to provide life cover for their employees. It is a policy that is set up by a business or employer on behalf of an employee and is typically used to provide a tax-efficient life insurance benefit to the person covered and their beneficiaries in the event of their death.

Unlike Key Person, Relevant Life Cover is typically not focused on protecting the business from financial losses but rather providing a valuable employee benefit for the covered employee and their family. Please check out our dedicated page for more information or quotes for key person insurance

What is covered?

Death and terminal illness are covered by all policy providers. Aviva is the only provider to include a serious illness option. 

Some providers will also allow you to add:

Relevant Life Cover FAQ

In general, policies are limited to twenty times the value of a person’s salary. If a person is earning £40,000, then the amount of cover could be an £800,000 tax-free lump sum. The limit for a relevant life quote is 20 x salary. Normally, a provider will accept a policy under £500,000 without the need for financial evidence.

The 1st step is to run through an application which is mainly questions relating to medical history. This can be submitted over the phone with an advisor or online using our new online application.

Once an application is submitted, it can either be accepted straight away or referred to underwriting. On acceptance, the advisor will notify the company and the policy can start on your chosen date.

No. Only employees of a UK Ltd company or UK LLP are eligible. Freelance workers, the self-employed, and sole traders will need to look at personal cover.

Yes, the company must be registered in England, Wales, Scotland, or Northern Ireland to be eligible. Overseas applications are not accepted.

Yes, when it comes to taking out this type of insurance policy, an LLP is treated the same as a Limited Company.

This will normally be dependent on their current salary. But there isn’t a fast rule on how much cover someone will need. Many employees follow the 4x salary rule taken up with a group life scheme. It’s really down to yourself and the employee and, of course, how much you are willing to spend on premiums. But in essence, small companies can now offer a death-in-service benefit or group life insurance to their employees.

Once you have a quote and are happy with the price, you can go ahead with the application. The length of time between submitting an application and the policy going live is determined initially by the life-assured age and the sum assured. A young person with a relatively low sum assured can be accepted straight away online. However, it depends on the complexity of the application, including the health and lifestyle of the person.


Generally, a person over 40 with an amount of cover of more than £500,000 will probably need further underwriting. This could include a nurse screening and a request for further medical evidence.

Why Choose Us?

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How it works

Quote & Apply Online in 3 Simple Steps.
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SUBMIT

Submit the details of the key
member of staff

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COMPARE

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APPLY

Fill out the application and get covered today.

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What people are saying about us.

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Excellent service with easy to
understand explanations

Jody was very helpful in explaining the options and I thoroughly recommend his company

We received a wonderful service
from…

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.

First Class Service

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.

What’s the maximum amount of cover?

In general, policies are limited to twenty times the value of a person’s salary. If a person is earning £40,000, then the amount of cover could be an £800,000 tax-free lump sum.The limit for a relevant life quote is 20 x salary. Normally, a provider will accept a policy under £500,000 without the need for financial evidence.

How does the application process work?

The 1st step is to run through an application which is mainly questions relating to medical history. This can be submitted over the phone with an advisor or online using our new online application.

Once an application is submitted, it can either be accepted straight away or referred to underwriting. On acceptance, the advisor will notify the company and the policy can start on your chosen date.

Can anyone take out a Relevant Life Policy?

No. Only employees of a UK Ltd company or UK LLP are eligible. Freelance workers, the self-employed, and sole traders will need to look at personal cover.

Can we take an income as appose to a lump sum?

Yes, we can arrange a policy to pay out monthly amounts. You may even be more suited to a key person income protection policy.

Does it have to be a UK company to take out the cover?

Yes, the company must be registered in England, Wales, Scotland, or Northern Ireland to be eligible. Overseas applications are not accepted.

Can an LLP take out Relevant Life Cover?

Yes, when it comes to taking out this type of insurance policy, an LLP is treated the same as a Limited Company.

How much should I insure the person for?

This will normally be dependent on their current salary. But there isn’t a fast rule on how much cover someone will need. Many employees follow the 4x salary rule taken up with a group life scheme. It’s really down to yourself and the employee and, of course, how much you are willing to spend on premiums. But in essence, small companies can now offer a death-in-service benefit or group life insurance to their employees.

How long does it take to set up a policy?

Once you have a quote and are happy with the price, you can go ahead with the application. The length of time between submitting an application and the policy going live is determined initially by the life-assured age and the sum assured. A young person with a relatively low sum assured can be accepted straight away online. However, it depends on the complexity of the application, including the health and lifestyle of the person.
Generally, a person over 40 with an amount of cover of more than £500,000 will probably need further underwriting. This could include a nurse screening and a request for further medical evidence.

Further Reading

Relevant Life Insurance Key man Insurance UK

5 Reasons You Should Take Out Relevant Life Insurance

Relevant life insurance is a type of life insurance policy that is taken out by businesses on behalf of their employees

Relevant Life Insurance Key man Insurance UK

Relevant Life Insurance HMRC Tax Treatment (updated) 2022

Relevant life insurance is a form of insurance that provides financial protection for an individual.

Relevant Life Insurance Key man Insurance UK

Relevant Life Insurance Calculator

Work out how much money you can save with our relevant life calculator. Our calculator

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