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Appointed Representative of The Right Mortgage Network (FCA No. 1004260). Company No. 15189091. Registered in England and Wales.
Protection · Family and home
Relevant Life Insurance for Directors
“A smarter way to protect your people.”
Relevant life insurance is a tax efficient way for limited companies to provide life cover for directors and employees. Paid by the business, and usually far cheaper than paying personally.
FCA regulated · leading UK insurers · 5 star reviews
Quick answer
Relevant life insurance is a death in service policy paid for by a limited company for a director or employee. Premiums are usually an allowable business expense and not treated as a benefit in kind, so no income tax or National Insurance is due on them. The main thing to know is that it must be written in a relevant life trust.
Who pays
Your limited company
Typical cover
Up to around 4 times remuneration
Tax position
Usually a business expense
Main thing to watch
Must be in the right trust
How relevant life insurance works
The company takes out the policy on the life of a director or employee and pays the premiums.
If the person dies during the term, the payout goes into a trust for their family, not to the business.
Because premiums come from pre tax company money rather than personal income, the saving can be substantial.
Setting it up properly
The policy must be written in a relevant life trust from day one. We’ll handle the paperwork.
Your accountant should confirm the tax treatment for your company, as it depends on the wholly and exclusively test.
Eligibility and what insurers assess
Who may qualify
Directors and employees of UK limited companies.
Company
Must be a limited company or LLP, not a sole trader.
Cover level
Usually up to a multiple of salary and dividends.
Health and medical history
Assessed like personal life cover.
Age
Within the insurer’s limits.
Common reasons for exclusions
Undeclared conditions.
What happens from first call to completion
1
Understand what you need to protect
We look at your mortgage, income, family and existing cover, including anything through work.
2
Work out the right amount and term
We size the cover to your debts and plans, so you’re not over or under insured.
3
Compare insurers on cover, not just price
Definitions and exclusions vary. We compare the policy wording as well as the premium.
4
Complete the application accurately
We help you answer the health and lifestyle questions fully, because that’s what makes a claim pay.
5
Handle underwriting
If the insurer needs GP reports or more information, we chase it and keep you updated.
6
Put cover in place and in trust
Once accepted we set the start date and, where it applies, help you write the policy in trust.
Costs, risks and when it may not be suitable
Being upfront about this is part of doing it properly.
What affects the cost
- Your age and health when you apply
- Smoking and lifestyle
- The amount and length of cover
- Guaranteed or reviewable premiums
- Optional extras such as indexation or waiver of premium
Risks to weigh up
- Cover ends if you leave the company
- Tax relief isn’t guaranteed, confirm with your accountant
- Insurers can refuse a claim if information given at application was inaccurate or incomplete
When it may not be suitable
- Sole traders and partnerships usually can’t use it
- If you want cover that moves with you, personal life cover is needed too
What you will need
The exact list depends on the insurer, but this is what to start gathering.
Photo ID and proof of address
Company details
Director or employee remuneration
GP details and medical history
Beneficiaries for the trust
How MBNM helps
- Work out how much cover you actually need and for how long
- Compare leading UK insurers on definitions, not just price
- Help you disclose your health and lifestyle properly so claims pay
- Explain premiums, trade offs and exclusions in plain English
- Handle underwriting and chase medical evidence
- Set up trusts where they apply and review cover when life changes
What it costs
Your first chat is free. If we can help, we will explain any fees before you decide whether to proceed. There are no hidden fees, and we will not move forward until you have agreed them.
Relevant Life Insurance FAQs
How much can the company insure me for?
Is the payout tax free?
Can I cover employees?
Is it a benefit in kind?
Can I include critical illness?
What if I sell the business?
Paying for life cover personally?
We’ll compare relevant life against your current cover and show you the saving.
Your first conversation is free and there's no obligation. If we can help, we'll explain any fees before you decide whether to go ahead.
Cover is subject to the insurer's terms, underwriting and exclusions.