The insurance policy is taken out and paid for by the business on the lives of its directors and/or employees. The plan is placed into trust for the benefit of the Directors/employees family.

Relevant Life Plans are ideal for small companies that don’t employ enough eligible staff to justify a group life scheme and/or high salaried directors and employees who have large pension funds and don’t wish for their death-in-service benefits to be used against their lifetime pension allowance.

They are not considered to be a benefit in kind, as the contributions are paid by the company and the monies paid to fund the policy would usually be seen by HMRC as an expense for the business.