Relevant Life Insurance
A tax-efficient death-in-service benefit for medical professionals
Relevant Life Insurance is well suited to surgeons, dentists and other clinicians operating through a limited company or small practice where a traditional group scheme may not be appropriate.
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What is Relevant Life Insurance?
Relevant Life Insurance (RLI) UK provides a death-in-service benefit that is paid out as a tax-free lump sum to nominated beneficiaries if the insured individual dies or is diagnosed with a terminal illness during the policy term. Unlike personal life policies paid from after-tax income, RLI premiums are paid by the company.
Key Characteristics:
- Single-life policy written to insure one individual at a time (e.g., a practice owner or key clinician).
- Policy premiums paid directly by the practice/company.
- Benefits are typically held in a discretionary trust to ensure efficient, direct payment to beneficiaries.
- Company directors seeking a more efficient way to protect their families.
- Self-employed contractors operating through a limited company.
- Small business owners providing benefits for key employees.
- Employees looking for extra protection outside group schemes.
If you fall into any of the categories above, Relevant Life Insurance for contractors, directors, or employees might be the best financial move you make this year.
What are the Tax Benefits?
In short, Relevant Life Insurance transforms practice-paid life cover into meaningful financial savings. It’s a tax-efficient way to provide valuable protection while managing costs effectively.
- Premiums are usually corporation tax deductible.
- No income tax or National Insurance is due on the premiums.
- Payouts are tax-free and outside the employee’s estate.
- Not treated as a benefit-in-kind, so there’s no impact on personal tax.
It’s the smart way to turn practice paid life insurance into meaningful savings for both the business and the insured individual.
Find out more about the Tax Saving Benefits.
All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.
Practice Risk Management: RLI can form part of a broader protection strategy for practice owners, alongside key-person insurance, shareholder or partnership protection, and income protection.
Tax Planning: Because RLI interacts with corporation tax, NICs and personal tax, coordinate with your accountant or financial adviser to ensure the policy meets HMRC “wholly and exclusively” tests.
Succession & Estate Planning: Integrating RLI with wills, trust structures and practice succession arrangements can enhance financial security for both your family and your professional legacy.
Key Facts in 90 Seconds
See why Relevant Life Insurance is the preferred choice of limited company directors as a tax-savvy way to protect what matters most.
Why Relevant Life Insurance Is Valuable for Surgeons & Dentists
For owner-managed practices, Relevant Life offers both personal protection for clinicians and commercial advantages:
1. Meaningful Protection for Dependants
If a clinician were to die or become terminally ill, RLI provides a substantial, tax-free payout to support family members or financial dependents.
2. Cost-Effective Alternative to Personal Cover
Because premiums are paid by the company rather than the individual, RLI often costs significantly less than equivalent personal life insurance purchased from net income.
3. No Benefit-in-Kind Charge
Premiums are generally not treated as a benefit-in-kind for the insured clinician, meaning there is no personal tax liability on the cost.
4. Corporation Tax Relief
Premiums are typically treated as allowable business expenses, enabling practices to reduce taxable profits.
5. National Insurance Savings
RLI premiums are usually not subject to employer or employee NICs, further improving cost efficiency.
6. Flexible, Tax-Free Payouts
A lump sum goes directly to loved ones, free of income and inheritance tax.
How Relevant Life Works In Practice
- Policy Setup – The company arranges an RLI policy on the clinician(s) you choose to cover.
- Premium Payments – Premiums are paid directly by the practice as a business expense.
- Trust Structure – The policy is placed into a discretionary trust, so the death benefit goes straight to your chosen beneficiaries outside of the insured’s estate.
- Claim – In the event of death or terminal illness within the policy term, the insurer pays a tax-free lump sum to the trust for the benefit of beneficiaries.
A Relevant Life Insurance policy isn’t just about numbers; it’s about people.
Relevant Life Insurance can support:
- Mortgage protection
- Clearing debts
- Replacing lost income
- Raising children
Your cover can be structured to fit your circumstances; whether you want level, increasing, or decreasing cover, or a policy that reflects mortgage repayment terms.
- Available for clinicians operating through a limited company or incorporated practice.
- Not normally available to sole traders or partners without an employer/employee relationship.
- Cover is generally offered up to the age of 75, with premiums and benefits tailored to age, health and cover amount.
How much could you save?
Enter your current personal protection premium, tax rates, and the calculator will provide the potential savings by moving to a relevant life plan.
How much does Relevant Life Insurance cost?
Costs vary based on age, cover amount, health, and term length, but one of the key advantages is that your business covers the premiums. This removes the cost from your personal budget while still protecting your family.
Use our Relevant Life Insurance Calculator above to calculate your savings.
Need help choosing between Relevant Life Insurance providers? Our team compares the market and provides tailored Relevant Life Insurance quotes that suit your business structure and financial goals.
Summary
For surgeons, dentists and other clinicians running limited companies or private practices:
- Relevant Life Insurance is a tax-efficient way to provide death-in-service benefits.
- Premiums are company-paid, corporation tax-deductible, and free from benefit-in-kind charges for the individual.
- Benefits are tax-free and trust-based, offering efficient support to beneficiaries.
If you are considering RLI as part of your personal and practice financial strategy, speak with a specialist adviser to tailor the cover to your clinical and business circumstances.
FAQs
Am I eligible to take out a Relevant Life Insurance policy?
You must have a limited company to benefit from the tax savings that a relevant life insurance policy offers. If you do not have a limited company then standard Life Insurance will offer you the protection you need.
Do I get any money back if I don't die before the Relevant Life Insurance policy term ends?
No. There’s no cash value at any time. Just like standard Life Insurance at the end of your Relevant Life Insurance policy term you stop making payments and your cover ends.
Can my mortgage be covered with Relevant Life Insurance?
If you have an interest-only mortgage, your outstanding mortgage loan stays the same until you repay it at the end of the mortgage term. Level Relevant Life Insurance could cover this type of mortgage.
How does Relevant Life Insurance work? What do I need to know?
Like standard Life Insurance, it provides your loved ones with a large tax-free, one-off payment, or monthly payments if you pass away. It can be used to pay the mortgage off or help your family with living expenses. You are covered only for the duration (term) of the policy and cover only lasts while you keep up monthly premiums. Monthly payments can be reduced by combining this with a Critical Illness policy.
The key difference between Life Insurance and Relevant Life Insurance is that with Relevant Life Insurance the cost of the premiums is moved from your own pocket to your company expenses. This saves you tax and reduces the cost of your monthly premiums.
Additionally, this is not treated as a benefit-in-kind; the premium is not included as a P11D benefit, nor are premiums subject to National Insurance payments for the employer or employee.
There is significant tax relief with a Relevant Life plan and your business can claim Corporation Tax Relief on the premiums. Plus, the payout itself is tax-free.
What is Terminal Illness Cover?
Terminal Illness Cover will pay out when you contract an illness/ disease that has no known cure or has progressed to a point where it cannot be cured, and you aren’t expected to live longer than 12 months.
What's the difference between Relevant Life Insurance and Over 50s protection?
The main difference is that Relevant Life Insurance is a tax-efficient term policy, so it covers you for a specific amount of time, while over-50 life insurance is a whole of life policy, so it covers you for the rest of your life.
Typically to take out a Relevant Life Insurance policy you need to be aged between 18 and 77 to apply, and your coverage stops at the end of the policy term. You choose a cover amount, and if you want your cover to remain the same, be protected from the effects of inflation, or decrease over time broadly in line with a repayment mortgage or loan. You can take out a single or joint life insurance policy.
If you’re not sure which one might be right for you, speak to a Broadbench financial adviser.
What’s the difference between Relevant Life and Life Insurance?
Life Insurance is cover that you pay for with your own money. However, if you are set up as a limited company, you can pay for your Life Insurance through your business, as a tax-deductible expense, saving you 20%. This is known as Relevant Life Insurance.
How can I set up a Relevant Life Insurance policy?
If you’re looking to set up your Life Insurance, our advisers can help you find the right policy for you and your family. Get in touch.
Ready to make the switch?
Fill out the form below to arrange a time to speak to a Relevant Life Insurance expert.