Relevant Life Policy Calculator

Use these two tools to see how a relevant life policy compares with paying for life insurance personally, and how much cover your company could arrange for you.

How this calculator works

The tax savings tool compares the after-tax cost of paying life cover premiums personally against paying the same premium through your limited company, using current income tax, National Insurance and corporation tax rates. The cover tool applies a typical insurer multiple to your total remuneration to give an indicative maximum sum assured. Both are simplified models intended to illustrate the shape of the comparison, not to replace a personalised quote.

Common questions

Why does my tax band change the result so much?

Paying personally means using income that has already had income tax and employee National Insurance deducted. The higher your tax band, the more income you need to earn to have the same amount left over, so the company-paid route shows a bigger relative saving for higher and additional-rate taxpayers.

Is the indicative cover figure guaranteed?

No. It’s a guide based on typical insurer multiples. Actual maximum cover depends on the insurer, your age, health, and remuneration evidence, and can vary between providers.

Why the company route can cost less overall

Paying a premium personally means paying it out of income that has already been taxed. To have a given amount left in your pocket you must first earn more than that amount, with income tax and employee National Insurance taken off along the way, and your company has already paid employer National Insurance on that salary too. Paying the same premium through the company skips those layers: the company pays the insurer directly, and the premium is generally an allowable business expense that reduces taxable profit. The calculator’s saving figure is essentially the size of those stacked layers, which is why it grows with your marginal tax band rather than with the size of the premium alone.

What the cover calculator is doing

The cover tool applies a multiple to your total remuneration, salary plus dividends, and in some cases benefits, to give an indicative maximum sum assured. Insurers use age-banded multiples, so a younger applicant is typically offered a higher multiple than someone closer to the upper age limit. The output is a starting point for a conversation, not an offer: the actual figure an insurer will write depends on their own multiple table, your evidence of remuneration, and the underwriting outcome.

What these tools deliberately don’t estimate

Neither tool estimates your premium. Premiums depend on age, health, smoker status, occupation, the term chosen and the insurer, and no calculator can produce a meaningful figure without underwriting information. The tax tool takes whatever premium you enter and shows the difference in how it’s funded, it does not tell you what that premium would be. It also assumes the policy is correctly written in a discretionary trust and that the premiums qualify as an allowable business expense, both of which depend on the arrangement being set up properly.

Does the saving apply to an existing personal policy?

Not to the existing policy itself, a personal life insurance policy cannot be transferred into a relevant life arrangement. What directors usually do instead is arrange new cover on the relevant life basis and cancel the personal policy once the new cover is on risk. Cancelling first is generally avoided, because the new application is subject to fresh underwriting and there is no certainty of the terms until it completes.

Related guides

• What Is a Relevant Life Policy?
• Tax Benefits of a Relevant Life Policy
• Who Qualifies for a Relevant Life Policy?

Results are illustrations based on 2025/26 UK tax rates and typical insurer terms. They are for information only and do not constitute financial advice. For figures tailored to your circumstances, speak to a qualified financial adviser.