Understanding How You Can Pay Your Life Assurance Through Your Business

Relevant Life Plans: The Smart Way for UK Business Owners, Directors, and Employees to Secure Life Assurance

Life is full of uncertainties, and it’s essential to protect ourselves and our loved ones from unforeseen circumstances. In the UK, one popular option for business owners, directors, and employees to organize their life assurance is through Relevant Life Plans. These plans offer unique advantages and opportunities to secure financial protection, with the added benefit of the company paying for the premiums. In this article, we’ll explore how Relevant Life Plans work, their advantages and disadvantages, key considerations for readers, and the importance of seeking professional advice.

Understanding Relevant Life Plans

Relevant Life Plans are a form of life insurance specifically designed for small businesses and their employees. Unlike traditional life insurance policies, these plans are set up and paid for by the employer, making them a tax-efficient way to provide life cover for employees.

How do Relevant Life Plans work?

  • Eligibility: Relevant Life Plans are available to company directors, employees, and even shareholders of small businesses, regardless of their size.

  • Policy Ownership: The employer takes out the policy and pays the premiums on behalf of the employee.

  • Tax Efficiency: The premiums are generally tax-deductible for the employer and are not treated as a benefit in kind for the employee.

  • Cover Amount: The sum assured is determined by the individual’s needs and can be based on a multiple of salary or a specific amount.

  • Portability: If an employee leaves the company, they can usually continue the policy on an individual basis, subject to the provider’s terms and conditions.

Advantages of Relevant Life Plans

  • Cost-effective: By offering life assurance as part of the employee benefits package, businesses can attract and retain top talent without a significant impact on their finances.

  • Tax savings: Premiums are generally tax-deductible for the employer, resulting in potential savings for the business.

  • Personalized coverage: Employees can tailor the policy to their individual needs, ensuring adequate protection for their loved ones.

  • No impact on pension allowance: Relevant Life Plans do not affect an individual’s pension annual allowance, making them an attractive option for higher earners.

  • Financial security: The assurance provided by these plans offers peace of mind, ensuring financial protection for families in case of an employee’s untimely demise.

Disadvantages and Considerations

  • Limited to business owners, directors, and employees: Relevant Life Plans are not available to self-employed individuals or those working for larger companies.

  • Limited coverage: These plans typically only cover death benefits and do not include critical illness or income protection. Additional coverage may be necessary for comprehensive protection.

  • Reviewing the policy regularly: As personal circumstances change, it’s essential to review the coverage periodically to ensure it remains adequate and meets the individual’s needs.

  • Implications of policy termination: If an employee leaves the company and the policy is not transferable, they may lose the life cover provided by the plan.

Seeking Professional Advice

When considering Relevant Life Plans, it’s crucial to seek professional advice from a qualified financial adviser or insurance broker. These experts can help assess individual circumstances, identify suitable coverage, and ensure compliance with regulatory requirements. They can also provide guidance on tax implications, policy terms, and help compare different providers to find the most appropriate plan.


Relevant Life Plans offer an excellent opportunity for UK business owners, directors, and employees to secure life assurance with the company paying the premiums. These plans provide tax-efficient solutions, personalized coverage, and financial security for loved ones in case of unfortunate events. However, it’s essential to consider the limitations, review policies regularly, and seek professional advice to make informed decisions. By understanding the workings of Relevant Life Plans and consulting experts, individuals can confidently navigate their way towards comprehensive life assurance.