Relevant Life Plans
The life cover most limited-company directors don't know they're allowed. Paid by the company, and usually far more tax-efficient.
If you run your own limited company and pay for life insurance from your personal bank account, you're likely doing it the expensive way. A relevant life plan is individual death-in-service cover owned and paid for by the company. Because premiums are typically an allowable business expense with no benefit-in-kind for you, the same cover can cost substantially less overall.
It's designed for exactly the people group schemes ignore, the directors and employees of companies too small for a group death-in-service scheme. I arrange relevant life plans for company directors across Kent, set up in trust as the rules require.
What working together looks like
The like-for-like comparison
I price your cover both ways, a personal policy from taxed income versus a relevant life plan through the company, so the saving is a number on a page, not a broker's claim.
Set up compliantly
Relevant life plans must be written into a relevant life trust and meet specific conditions to keep their tax treatment. I handle the trust paperwork and keep the structure clean.
Fitted into the bigger picture
Relevant life covers death in service. It can't include critical illness or income protection. I design it alongside those covers so nothing important is left assumed.
Is a relevant life plan right for you? Quick eligibility check
Broad strokes, and I confirm the specifics case by case:
- You're an employee or salaried director of a UK company (including your own)
- Cover is for death in service (life cover, with terminal illness benefit)
- The policy will be company-paid and written in a relevant life trust
- Sole traders and equity partners aren't eligible, but they have alternatives worth discussing
Asked all the time, answered honestly
How much can a relevant life plan save compared to a personal policy?
Because premiums are typically corporation-tax deductible, carry no employer or employee National Insurance and aren't a benefit in kind, combined savings can be substantial for a higher-rate-taxpaying director. The exact figure depends on your rates, which is why I show the comparison in your numbers, not a brochure's.
Does HMRC have to approve it?
There's no approval process, but the plan must meet the legislative conditions. It must be properly in trust, with benefits payable to family or dependants, and have no surrender value. Set up correctly (which is my job), the tax treatment follows.
How much cover can I have?
Insurers commonly allow a generous multiple of your total remuneration, often 10 to 25 times depending on age, and 'remuneration' can include salary and dividends. For most directors the practical ceiling is comfortably above what they need.
What happens if I close or sell the company?
Plans can usually be transferred to a new employer or converted to a personal policy, so the cover isn't lost with the company. It's a standard what-if I cover at setup.
Can it include critical illness cover?
No. The legislation limits relevant life plans to life cover (with terminal illness benefit). Critical illness and income protection are arranged as separate policies, and I'll design the pieces to fit together.
Let's talk about relevant life plans
A free, no-obligation chat is the easiest first step. Tell me what you're hoping to do, and I'll tell you honestly how I can help.