Do I Qualify for a Relevant Life Policy?

Relevant life policies are only available to certain people. Answer four quick questions to see whether you are likely to qualify.

In short: directors and employees of UK limited companies generally qualify. Sole traders and equity partners do not, because there is no employer to take out the policy. Age limits vary by insurer.

How the eligibility check works

The quiz above checks the core eligibility rules that insurers apply before underwriting even begins: company structure (limited company or LLP rather than sole trader), employment or directorship status, and age. It gives an instant indication rather than a formal decision, insurers still carry out their own health and underwriting assessment once you apply.

What happens after the quiz

If you qualify, the next step is usually a conversation with a whole-of-market adviser who can compare providers and structure the discretionary trust correctly. If you don’t qualify, most commonly because you’re a sole trader or equity partner, personal life insurance is the usual alternative route.

Why the quiz asks about company structure first

Company structure is the single biggest factor in relevant life policy eligibility, which is why the quiz checks it before anything else. Limited company directors, employees and LLP salaried partners generally pass this first check; sole traders and equity partners in traditional partnerships do not, regardless of age, health or income, because there is no separate employer entity to hold the policy.

Edge cases the quiz can’t resolve on its own

Most eligibility questions are settled by company structure and age, but a few situations need a person to look at them. A director of a UK limited company who takes all their income as dividends and pays no salary can usually still be covered, because directorship rather than payroll status is the qualifying relationship, but the remuneration used to calculate maximum cover may be assessed differently. Someone who is a director of more than one company needs the policy arranged through the company that genuinely employs them. A non-executive director, a contractor working through their own limited company, and an employee of a UK branch of an overseas parent are all commonly eligible, but the answer turns on the specific employment relationship rather than the job title. If the quiz result and your circumstances don’t obviously match, that’s usually a sign one of these applies.

If you don’t qualify

Sole traders and equity partners in traditional partnerships cannot use a relevant life policy, because there is no separate employer to own the policy and pay the premiums. That does not leave you without options. Personal life insurance written in trust achieves the same protection outcome for your family and the same inheritance tax position, without the corporation tax and National Insurance treatment. Business protection arrangements such as key person cover or shareholder protection address different needs again and are worth separating out from personal family cover when you review what you actually need.

What to have ready before you speak to an adviser

Nothing formal is required to start the conversation, but three things make it faster: your company structure and your role in it, your total remuneration for the last twelve months including dividends, and a rough figure for the cover you think your family would need. Health and lifestyle questions come later, at application, and are the same ones any life insurance application asks.

Related guides

• Who Qualifies for a Relevant Life Policy?
• What Is a Relevant Life Policy?
• Speak to an Adviser