Relevant Life

Get the most tax-efficient way to protect your family

Most company directors are savvy enough to have life insurance, but very few realise they could save thousands in premiums by taking advantage of a Relevant Life plan.

In fact, according to a research paper published by Legal & General in 2015, just 28% of UK Limited Company Directors have heard of Relevant Life policies.

The thing is, Relevant Life cover could make great business sense for you and your family because it’s extremely tax-efficient and allows a higher level of cover than traditional death-in-service policies.

What is Relevant Life cover?

Simply put, it's the most tax-efficient way for company directors or their employees to pay life insurance premiums. Relevant Life plans are virtually identical to ordinary personal life insurance policies, except there's typically a real-terms saving of between 36% and 53% on the premium, depending on your income tax bracket.

Relevant Life plans were introduced in 2007, after changes to pension legislation allowed UK insurers to develop a death in service policy which didn't count as an employee 'benefit in kind'. And although it's been nearly a decade since the cover was first offered, public awareness still remains shockingly low. As a consequence, thousands of people in the UK still pay significantly more than they need to for their life cover.

Relevant Life

Get the most tax-efficient way to protect your family

  • What is Relevant Life cover?

    What is Relevant Life cover?

    Simply put, it's the most tax-efficient way for company directors or their employees to pay life insurance premiums. Relevant Life plans are virtually identical to ordinary personal life insurance policies, except there's typically a real-terms saving of between 36% and 53% on the premium, depending on your income tax bracket.

    Relevant Life plans were introduced in 2007, after changes to pension legislation allowed UK insurers to develop a death in service policy which didn't count as an employee 'benefit in kind'. And although it's been nearly a decade since the cover was first offered, public awareness still remains shockingly low. As a consequence, thousands of people in the UK still pay significantly more than they need to for their life cover.

  • How does a Relevant Life plan save money?

    How does a Relevant Life plan save money?

    In most cases, Relevant Life policies are counted as an allowable business expense by HMRC - which means the employee saves money on Income Tax and National Insurance contributions, whilst the business saves on National Insurance and gets Corporation Tax relief on the insurance premiums. So for a taxpayer in the 40% Income Tax bracket paying life cover premiums from their personal income, the real-terms saving is normally 49%. Over the full term of a typical life cover plan - say twenty years - the savings often add up to tens of thousands of pounds.

    Check out this short video for an overview of Relevant Life.

  • Here's an example of how it works:

    Here's an example of how it works:

     
     
    Personal Plan
    Relevant Life
    Annual Premium
     
    £1290
    £1290
    EMPLOYEE TAX
     
     
     
    National Insurance
    2%
    £44.48
    £0
    Income Tax
    40%
    £889.66
    £0
    EMPLOYER TAX
     
     
     
    National Insurance
    13.8%
    £306.93
    £0
    Corporation Tax
    20%
    -£506.21
    -£258
    Tax-adjusted cost
     
    £2024.86
    £1032
    49% real-terms saving
     
     
    £992.86
    Saving over a 20 year term
     
     
    £19,857.20

    This example is for illustrative purposes only. Figures are based on the 'tax calculators' provided online by VitalityLife, Legal & General, and Aviva.

     

  • Who can benefit from Relevant Life cover?

    Who can benefit from Relevant Life cover?

    A Relevant Life plan is paid for by the business and insures the life of its employees. This means that Limited Company Directors or their employees can be covered, as can the employees of Limited Liability Partnerships. However, sole traders and equity members of an LLP can't be covered by a Relevant Life insurance policy.

    Who can benefit from Relevant Life insurance.

    Who CAN benefit

    Directors of UK Limited Companies
    Employees of UK Limited Companies
    Employees of UK Limited Liability Partnerships
    Employees of a UK Partnership

    Who DOESN'T benefit

    Equity partners of UK Limited Liability Partnerhips
    Equity partners of UK Partnerships
    Sole Traders

  • How to Compare Relevant Life Plans

    How to Compare Relevant Life Plans

    In the modern age, it's common to compare life insurance quotes by shopping online and using one of the the myriad of comparison sites now available. But you can't compare Relevant Life quotes because the policy is designed for business, so you won't find them on comparison sites. So how do you compare Relevant Life policy providers and make sure your business life insurance is the best death in service benefit available?

    Simple. You get specialist advice.

    Specialists 4 Protection pride ourselves on the expert advice we give to business owners every day, helping them get the savings and increased cover provided by a Relevant Life plan. We're fully independent, so we compare Relevant Life insurance premiums with all major UK insurers to get the best deal - and when you get a policy we handle all the paperwork for you.

    But the best bit?

    Our expert advice is free, and you're under no obligation to follow the recommendation we make.

    So to chat with a specialist in protection and find out more about how a Relevant Life policy can benefit you, your family and your business, just call 01243 219190 or click the button below.

    Get Advice & Quote

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