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Relevant life insurance for directors, paid by your company
Relevant life insurance for directors lets a limited company pay for life cover on a director, with the benefit paid through a trust to the director's family (Royal London ↗).
Legal & General's plan covers company directors on PAYE (Legal & General ↗), and the insurers say the premiums are not a P11D benefit (Royal London ↗).
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
Relevant life for directors, the key facts
A relevant life plan is single life cover an employer takes out and pays for on behalf of an employee or director (Royal London ↗).
For a director of their own company, that means the company pays for cover whose payout goes to the director's beneficiaries, not to the company.
- The company pays
The employer takes out the policy and pays the premiums (Aviva ↗).
- Directors included
Company directors on PAYE, says Legal & General (Legal & General ↗); salaried directors, says Aviva (Aviva ↗).
- In trust
Set up under trust from the start, and owned by the trustees (Royal London ↗).
- Dividends count
Legal & General counts regular dividends from the employer's company as remuneration (Legal & General ↗).
- Age 75
The death benefit must be for death under an age no higher than 75 (HMRC ↗).
- Not business cover
Not to be used for key person or shareholder protection (Legal & General ↗).
What is relevant life insurance for directors?
It is the same product as relevant life for any employee, seen from the director's side.
The company is the employer: it proposes the plan and pays for it, and the plan sits in trust for the director's chosen beneficiaries (Aviva ↗).
Royal London says it is not a company asset (Royal London ↗).
Set against a life policy a director buys personally, the difference is who pays and how the premium is treated.
The relevant life column is the insurers' statement of the tax position. Check each row at its link.
Tax savings for directors: how the premium is treated
Legal & General says the premiums are not usually treated as employee income or a P11D benefit, so the employee pays no income tax on them and neither side pays National Insurance, and that paid wholly and exclusively for the business they should be allowable expenses for the employer (Legal & General ↗).
On the payout, HMRC says a payment from a relevant life policy is not chargeable under the employer-financed retirement benefits rules (HMRC ↗).
Legal & General says benefits paid through its trust should not form part of the employee's estate for inheritance tax (Legal & General ↗).
We give no worked example of the saving: it depends on your salary, dividends and the company's tax position.
Ask your accountant to work it out for you.
Premium
The company pays
Not usually treated as the director’s income or a P11D benefit, says Legal & General.
National Insurance
None on the premium
Neither employer nor employee, say Legal & General and Royal London.
The company
An allowable expense, if…
Paid wholly and exclusively for the purposes of the business, say the insurers.
Payout
Outside the EFRBS charge
HMRC: not chargeable under the employer-financed retirement benefits rules.
Legal & General (Legal & General ↗), Royal London (Royal London ↗) and HMRC (HMRC ↗).
Relevant life vs other director insurance options
A director can sit under several company-paid policies at once, each paying a different person.
Relevant life pays the family (Royal London ↗); key person cover pays the company (Legal & General ↗); executive income protection pays the business to fund the director's sick pay (Legal & General ↗); shareholder protection funds the other owners buying the shares (Royal London ↗).
How to set up relevant life insurance as a director
The insurers' guides give the order.
The person covered must be a UK resident employee of a UK-resident business (Legal & General ↗).
The maximum cover depends on age and remuneration, which Legal & General takes to include salary, bonuses, benefits in kind and regular dividends from the employer's company (Legal & General ↗).
The policy is written in trust from the outset (Legal & General ↗), and HMRC's conditions restrict the beneficiaries to individuals and charities (HMRC ↗).
An FCA-authorised adviser can arrange it; we do not.
Eligible?
Check you are an employee
A director on PAYE or a salaried director, resident in the UK, of a UK-resident company.
Amount
Work out the cover
By age and remuneration, dividends included at Legal & General.
Apply
The company applies and pays
The company is the employer, so it takes out the plan and pays the premiums.
Trust
Set up the trust and beneficiaries
Written in trust from the start, for individuals or charities.
Relevant life for directors, the key numbers
Legal & General publishes the most cover it will usually consider, as a multiple of remuneration by age (Legal & General ↗).
Other insurers set their own limits; Aviva takes applicants aged 18 to 73 for life cover only (Aviva ↗).
Whatever the insurer, HMRC's conditions cap the age for the death benefit at 75 (HMRC ↗).
Legal & General's maximum relevant life cover, as a multiple of remuneration
Legal & General (Legal & General ↗). Check the limits at the link.
HMRC (HMRC ↗)
Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- HMRC Employment Income Manual, EIM15045 ↗Relevant life policy conditions and the EFRBS treatment
- HMRC Employment Income Manual, EIM21800 ↗Provision for any individual or charity since April 2019
- ITEPA 2003, section 393B ↗Where "relevant life policy" is defined
- Legal & General relevant life guide ↗Directors on PAYE, cover multiples, tax and leaving (W13965)
- Royal London relevant life FAQs ↗Conditions, P11D, National Insurance, business expense and leaving
- Aviva Relevant Life Insurance adviser guide ↗Salaried directors, ages, trust and leaving
- HMRC Business Income Manual, BIM45525 ↗What key person cover insures against
- Legal & General key person insurance ↗Who owns, pays for and receives key person cover
- Legal & General Executive Income Protection ↗Cover that funds an employee’s sick pay
- Royal London shareholder protection guide ↗Own-life plans in trust for co-shareholders
- MoneyHelper: the cost of protection insurance ↗What premiums depend on
Relevant life for directors, answered
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.