Relevant Life

A tax-efficient employee perk

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Relevant life cover is an alternative if you would prefer not to create a group scheme, but you would like to provide your own death in service benefits.

Relevant life cover is a tax efficient way for employers to provide individual death-in-service benefits to employees.

It pays out a lump sum if the employee dies or is diagnosed with a terminal illness during the term of the policy. It’s paid for by the business and placed into trust. This means the lump sum is paid out quickly to the employee’s beneficiaries and is free from inheritance tax.

Who is it for?

  • SMEs that don’t have enough staff to warrant a group scheme.
  • Members of a group scheme that would like to top up their benefits.
  • Directors who would prefer not to create a group scheme but would like to provide their own individual ‘death in service’ benefits.
  • Anyone classed as a high earning individual i.e. directors, where ‘death in service’ is not currently included in their lifetime allowance.


  • It’s a tax efficient alternative to group life insurance.
  • It’s a good way to attract and retain quality staff.
  • It gives employees life insurance without them having to pay premiums.
  • It can be treated as an expense, which could lower your business’s tax bill.

Related FAQs

See all FAQs

How much cover would be needed for keyman insurance?

This would depend on your specific business needs which we would discuss together. This could be a multiple of profits, a multiple of salary or turnover. Your accountant would be able to provide this information to you.

How do I know how much shareholder cover is needed?

We recommend you speak to your accountant who will help to establish the value of the business. The amount of cover should equal the market value of each owner’s share of the business.

What is keyman insurance?

It is a life insurance where critical illness cover can also be included to protect your business against the loss of profit should a key employee pass away or be diagnosed with a critical illness. You can also protect against the loss of a key employee to protect a debt, and it could also help towards the costs of employing and training new personnel.

Who could be classed as a key employee?

Key employees can be regarded as individuals whose knowledge, skills, experience, key relationships or leadership are very important to a business’ future financial success.

These can be a senior manager, top sales person, technical specialist, business founder.

What is shareholder protection?

Shareholder protection is a life or life and critical illness policy that will pay out a lump sum that the remaining shareholders use to purchase the deceased shareholders shares from their estate.

Who should consider a relevant life policy?

Directors could take out the cover to provide a ‘death in service’ benefit, without having to take out a scheme to cover all employees. It helps to retain employees and ensure should the worst happen, their loved ones are financially cared for.

What is a relevant life policy?

It is a term assurance available for employers to provide employees with a ‘death in service’ benefit. It provides a lump sum payment on death and there can be many tax advantages to both the employer and employee for this type of policy.

What are the benefits of a relevant life policy?

No National Insurance contributions on premiums and corporate tax relief for the business itself. For their employee there will be no National Insurance contributions on premiums or benefits. The benefits are not taxed as a benefit in kind and importantly the benefits do not count towards annual or lifetime allowances tax benefits.

Who can take out a relevant life policy?

UK resident businesses. These businesses can be a limited companies, a limited liability partnership or sole trader.

Company directors can take out cover with the limited company paying for this.

How much does keyman cover cost?

The cost would be dependent on the amount and term of the cover, age, smoking status. Please contact us for a personalised quote.

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