Relevant Life Policies for Directors

Relevant life policies are company-paid life cover arrangements with specific tax rules — useful for some directors and employees, not a casual add-on.

High-level appeal

Premiums may be an allowable business expense with careful structuring, and benefits can sit outside the member’s pension lifetime considerations under historical regimes — rules evolve, so verify current tax treatment.

Eligibility and purpose

Policies must meet legislative conditions. They are for death benefits, not savings. Personal IHT and trust design still need thought.

Alongside personal cover

Relevant life does not automatically replace personal term for every family goal. Map both.

Practical next steps

Treat this topic as a decision with paperwork attached. Write down the household facts that matter — who depends on income, which debts must clear, and which workplace benefits already exist — before you compare products. A clear brief stops glossy quotes from steering the plan.

When you speak to an insurer or adviser, ask for definitions and exclusions in writing, and keep PDFs of every illustration you rely on. Markets and underwriting change; your notes are the audit trail.

• Confirm what cover you already hold (personal and workplace).
• Size need against obligations, not round marketing numbers.
• Align wills, trusts, and nominations with the policy.
• Never cancel old cover until replacement is on risk.

Mistakes families make here

The common failure mode is optimising for the cheapest monthly figure while ignoring structure: joint versus single policies, accelerated versus additional benefits, and whether a trust exists at all. Another is letting group benefits create false confidence until a resignation removes them overnight.

Build a short annual review habit. An hour with schedules and nomination forms prevents most emergency weekends after a diagnosis or redundancy.