Protecting your business: Relevant life policies

Directors can use this to replace personal cover and put the cost through the business.

These are single individual Death in Service benefits paid by the employer on behalf of the employee. This type of policy is suitable for small businesses that might not normally be able to access this type of cover. The policy is placed in trust for the benefit of the dependents. Relevant Life Policies have greater benefits than traditional Death in Service policies.

Main advantages

  • Benefits do not count towards the pension lifetime allowance.
  • Potential tax relief on the premiums for the employer.
  • No benefit-in-kind assessment on the employee.
  • Premiums are not subject to national insurance payments.
  • The benefit is paid free of income tax in most cases.
  • Benefits are paid free of Inheritance Tax*.

Shareholding directors can save 49% on the cost of life cover
* A charge may apply in exceptional circumstances

Additional business protection policies to consider:


All financial advice is given by Penda Financial Management Ltd.

Penda Financial Management is authorised and regulated by the Financial Conduct Authority for advising on and arranging mortgages, insurance and personal investments. FCA number: 504162.