Director Life Insurance

Tax-efficient life cover for company directors — paid by the company, not from your personal income.

Company directors have a significant advantage when it comes to life insurance. Rather than paying for personal life insurance from post-tax income, most directors can arrange a Relevant Life Plan — a tax-efficient policy paid by the company as a business expense. The result is the same life cover for your family, at a substantially lower net cost. We arrange both personal and company-funded life insurance and will recommend the most appropriate structure for your circumstances.

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What is Director Life Insurance?

Director Life Insurance refers to life insurance arranged specifically for company directors, taking advantage of the tax efficiencies available to limited company owners. The most common and cost-effective structure is a Relevant Life Plan — a death-in-service style policy taken out and paid for by the company on the director's life. The company pays the premiums as a business expense, saving corporation tax. The director pays no income tax or National Insurance on the premiums. The payout is written in trust and falls outside the director's estate, avoiding inheritance tax. For a higher-rate taxpaying director, the saving compared to a personal policy can be very substantial. Directors who have exceeded their pension lifetime allowance may also use a Relevant Life Plan to provide death benefits outside the pension framework, avoiding the associated tax charges.

Who is it suitable for?

Company directors of limited companies seeking tax-efficient life cover

Owner-managed businesses where the director pays their own premiums from post-tax income

Directors who want to provide for their family without the inheritance tax exposure of a personal policy

Directors who have exceeded their pension lifetime allowance

Higher and additional rate taxpayers where the tax saving is most significant

Any director without adequate life cover who wants to arrange it cost-effectively

Key Benefits

Premiums paid by the company — typically treated as a business expense saving corporation tax

No income tax or National Insurance on premiums for the director

Payout written in trust — falls outside the director's estate, no inheritance tax

Significantly more cost-effective than a personal policy for most directors

Can cover up to 25x total remuneration (salary plus dividends)

Provides death-in-service style benefits without the need for a group scheme

Can be arranged quickly — cover in place within days in straightforward cases

Whole-of-market access — we compare all leading insurers

No broker fees

Tax Considerations

For most company directors, a Relevant Life Plan is the most tax-efficient way to obtain life cover. The company pays the premiums as a business expense, which can reduce the corporation tax bill. The director pays no income tax or National Insurance on the premiums — unlike a personal policy paid from post-tax income. The payout is written in trust and falls outside the director's estate, so it is not subject to inheritance tax and is paid directly to beneficiaries without going through probate. Compared to paying for life insurance personally from post-tax income, the saving can be very significant — particularly for higher-rate and additional-rate taxpayers. Tax treatment depends on individual and business circumstances and may be subject to change. We recommend seeking independent tax advice.

Tax treatment depends on individual circumstances and may be subject to change. We recommend seeking independent tax advice.

Real-World Examples

Higher-rate director — significant premium saving

A director paying 40% income tax and 2% National Insurance wants £600,000 of life cover. Currently paying £120/month from personal post-tax income, the gross cost is considerably higher. By switching to a Relevant Life Plan, the company pays the premiums as a business expense. The director receives the same cover at a fraction of the effective net cost — freeing up personal income.

Director with pension lifetime allowance concerns

A director has maximised their pension contributions and is approaching the lifetime allowance. Death benefits paid through a pension above the allowance are subject to a significant tax charge. A Relevant Life Plan provides death benefits entirely outside the pension framework — the payout goes directly to the family via trust, with no pension tax charge and no inheritance tax.

New director — no existing life cover

A director of a recently incorporated limited company has no life insurance in place. Their partner and two children depend entirely on their income. A Relevant Life Plan is arranged through the company within a week — providing £500,000 of cover written in trust for the family. The company pays £65/month as a business expense.

Director switching from personal policy

A director has been paying for personal life insurance for several years without realising a Relevant Life Plan was available. We review their existing cover, arrange a Relevant Life Plan with equivalent or better terms, and the company takes over the premium payments. The director's personal outgoings reduce immediately.

Frequently Asked Questions

Request Your Relevant Life Quote

Find out if your business protection is adequate, correctly structured, and as tax-efficient as it could be.

Why Choose JK Insurance Brokers?

Whole-of-market access — all leading insurers
FCA authorised & regulated (FRN 1047042)
No broker fees — ever
Business protection specialists
Personal, one-to-one service with Tom Dobbe
UK-wide advice by phone or video call
Ongoing reviews as your business grows

Speak Directly to Tom

I help company directors and business owners protect their families, shareholders and businesses.

01737 333249 [email protected]