The employer’s role
The employer arranges and pays for the cover for an eligible employee or director. Not every working arrangement qualifies. Being self-employed or owning a business does not, on its own, establish eligibility.
Relevant Life Cover
Life cover arranged through an employer.
Relevant life is a life insurance policy arranged and paid for by an employer for an individual employee or director. It can provide a lump sum for their beneficiaries if they die while covered, subject to the policy terms.
It is often considered by smaller businesses without a group death-in-service scheme. Eligibility, the trust arrangement and the cover need checking. Tax treatment depends on the policy meeting the relevant requirements and on individual and business circumstances; it is not an automatic saving.
Be clear about who the cover is for
The beneficiaries
The cover is intended for the insured person’s beneficiaries, rather than compensation for lost business profits. The policy and trust need to be set up appropriately, with the relevant people and responsibilities clearly recorded.
Conditions and tax
Favourable tax treatment may be available when the requirements are met. The position depends on the policy, business and individual, and can change. Obtain appropriate tax advice rather than relying on an advertised saving or a general example.
Look beyond the first year of cover
Consider how much cover is appropriate and how long it is needed, alongside any existing personal or employer benefits. The application and underwriting still matter: employer payment does not mean automatic acceptance or the same terms for everyone. The policy is not designed to give the insured person personal access to savings while alive.
Employment can change during the term. Check what the policy allows if someone leaves, the business changes or another employer wishes to take over the arrangement. Do not assume cover continues unchanged or transfers automatically. Keep the trust and beneficiary information under review, and distinguish this employee benefit from insurance intended to protect the business itself.
How protection advice works
Understand your needs
We’ll discuss your circumstances, existing cover and budget, including the people or commitments you want the insurance to support.
Explain the recommendation
We’ll explain the recommended policy, its premiums, benefits and important limitations, so you can consider what it would and would not cover.
Check the final terms
If you choose to proceed, the insurer assesses the application. Check the terms offered and the confirmed start date before relying on cover.
Getting started
Can a sole trader cover themselves this way?
Relevant life is an employer–employee arrangement, so a sole trader generally cannot use it to cover themselves in that capacity. A business may be able to arrange it for an eligible employee. Director and other employment situations need checking against the actual requirements.
Is it a replacement for a group scheme?
It is individual cover, often considered where a group death-in-service scheme is not in place. Whether it fits depends on the business and employee needs. Compare existing benefits, eligibility, cost and administration rather than assuming an individual policy is always preferable.
Does it protect business profits?
That is not its intended purpose. The benefit is for the employee’s beneficiaries under the arrangement. Key-person or other business protection addresses different financial risks, so these should not be treated as interchangeable policies.
Cover, exclusions and claim conditions vary. Keep up the required premiums to maintain your cover.
