Risk warning: A relevant life policy is a form of life insurance and typically has no cash-in value at any time; cover will cease at the end of the policy term. If premiums are not maintained, the policy will lapse and cover will be lost. Tax treatment depends on individual circumstances and may change in the future. This article is for information only and does not constitute financial advice.
“Compare relevant life insurance” usually means one of two different questions: comparing a relevant life policy against other ways of protecting a director, or comparing what varies between relevant life policies from different insurers. This guide covers both, because the two questions need different answers.
Quick Answer: What Should You Actually Compare?
Relevant life policies are broadly similar in tax treatment, so the meaningful differences are insurer underwriting stance, the trust wording provided, whether cover is level or increasing, and the additional benefits included at no extra premium. Price alone rarely separates them.
What Differs and What Doesn’t: At a Glance
| Feature | Varies by insurer? | Why it matters |
|---|---|---|
| Corporation tax treatment of premiums | No | Set by HMRC rules and the company’s own circumstances, not the insurer. |
| P11D and National Insurance position | No | Determined by the qualifying conditions, identical across providers. |
| Maximum cover multiple of remuneration | Yes | Multiples and the treatment of dividends differ, which can change how much cover is available. |
| Underwriting of health and occupation | Yes | The same applicant can be assessed differently by different insurers. |
| Trust documentation supplied | Yes | Some provide the trust as standard at application; others leave more to be arranged. |
| Level or increasing cover options | Yes | Affects whether the sum assured keeps pace with inflation over the term. |
| Included extras such as terminal illness or support services | Yes | Often included without extra premium, so worth checking rather than assuming. |
| Portability if you leave the company | Yes | Continuation terms differ, which matters if the business is likely to change. |
The table is a general guide. Individual policy terms, definitions and exclusions vary, so the wording of a specific policy takes precedence over any summary. Tax treatment depends on individual circumstances and may change in the future.
What Actually Varies Between Relevant Life Policies
Once you strip away marketing language, relevant life policies from different insurers are more similar than different, they all rely on the same HMRC conditions, and they all use a discretionary trust to pay out to your chosen beneficiaries rather than the company. What genuinely varies between insurers is underwriting approach (how they assess your health and occupation), the maximum level of cover they’ll offer relative to income, policy terms and definitions, and the trust documentation they provide. None of this is something you can meaningfully compare from a published rate table, because pricing is individually underwritten.
Relevant Life Policy vs Ordinary Personal Life Insurance
A personal life insurance policy is paid for from your own income, after income tax and National Insurance have already been deducted. A relevant life policy is paid for by your company, and, provided it’s correctly set up, premiums are usually outside your personal income tax and National Insurance calculation, and the company can normally treat the premium as a deductible business expense. The trade-off is that a relevant life policy only exists while you remain an employee or director of the company paying for it; personal cover follows you regardless of your work situation.
Relevant Life Policy vs Group Death in Service
Group death in service schemes are usually only available to companies with several employees, since insurers set a minimum group size. A relevant life policy is designed to give a single director or small team a broadly comparable structure, company-paid, trust-based, outside personal tax, without needing a group scheme. For a full breakdown of how the two compare on ownership, tax treatment, and eligibility, see our relevant life policy vs death in service guide.
What Insurers Look At When Comparing Applications
Underwriting for a relevant life policy works the same way it does for personal cover: insurers assess your age, health, and the level of cover requested. What differs between insurers is how they weigh those factors, which occupations they’re comfortable insuring at standard rates, and how quickly they can turn around an application. This is exactly the kind of comparison that’s difficult to do accurately without professional input, because two insurers can reach very different underwriting decisions for the same person.
Why You Can’t “Compare Quotes” Online the Way You Can for Personal Cover
Consumer price-comparison sites work for personal life insurance because the product is broadly standardised and providers publish rate tables. Relevant life policies don’t work that way, the premium depends on your company structure, your role, your health, and the level of cover chosen, and it’s arranged through an adviser or broker rather than bought directly online. Any site showing you a generic “relevant life insurance comparison” table without asking about your company and circumstances first isn’t giving you a comparison that applies to your situation.
What a Broker Actually Compares For You
A whole-of-market adviser compares insurers on the factors that actually matter for your circumstances, underwriting stance for your occupation and health history, the maximum cover level relative to your remuneration, and how each insurer’s trust documentation is structured, rather than on a headline price you can’t get without underwriting anyway. That’s a more useful comparison than anything a self-service tool can produce, because it’s based on how insurers would actually treat your specific application.
Getting a Comparison Tailored to Your Company
Because so much of what varies between relevant life policies depends on your company’s structure and your own circumstances, a comparison that means anything has to start with a conversation about both. A regulated adviser can compare insurers on your behalf and explain why one might suit your situation better than another, rather than leaving you to interpret rate tables that don’t apply to a company-paid, trust-based product.