What Type of Life Insurance Can You Have Under a Relevant Life Policy?

I am a company director with a mortgage and family I want to cover with Life Insurance. I spoke to my accountant and he mentioned Relevant Life Cover. Is it possible to use this to protect these risks?

Question asked by Richard Fry

Relevant Life Insurance is most commonly Level Life Insurance, where the benefit remains fixed at a multiple of the insured individual’s remuneration over time.

This is because it’s designed to be similar to Group Life Insurance, where the payout also remains fixed over time. Contractors and directors working through their own limited companies frequently use Relevant Life Cover.

Businesses can also use this cover where there aren’t sufficient staff numbers for a Group Life scheme. Typically, you must have at least three to five staff to get a Group scheme off the ground.

However, while Relevant Life Insurance does provide a lump sum payout on your death for your family, and does so with very tax-efficient premiums, it’s not necessarily always the best option.

For example, it isn’t usually suitable to run alongside most mortgages, which are today usually repayment mortgages. This is opposed to personal Decreasing Term Life Insurance, which is designed to.

Decreasing Term Life Insurance falls over time alongside the mortgage, whereas Relevant Life Cover stays at a fixed sum. Cover that remains fixed over time tends to be more expensive due to the fact that the risk to the insurer remains the same even as we age.

It may therefore end up being more expensive, even with the premium discount from running the cover through your limited company, to insure your mortgage with Relevant Life Cover.

Help and Advice…

Whether you should chose Relevant Life Insurance or not depends on your circumstances.

To make sure you set it up correctly, speak to a financial adviser. One of the team at Drewberry would be happy to discuss this with you.

Don’t hesitate to pop us a call us on 02084327333 or email us at help@drewberry.co.uk and our expert advisers can talk you through the different options in more detail.

I’ve held a policy with Drewberry for several years now. They are always friendly, insightful and offer great service.

Dan Pettitt
13/01/2021
Reviews.co.uk Logo
Compare Top 10 UK Business Insurers
Takes approx. 60 seconds
  • £

Or call us on 0208 432 7333

Compare Top UK Insurer Quotes Logos
Contact Us
Head Office & Pensions and Investments
Senator House
85 Queen Victoria Street
London
EC4V 4AB
Personal Insurance & Accounts Payable
Telecom House
125-135 Preston Road
Brighton
BN1 6AF
Drewberry London Office MapDrewberry Brighton Office Map
Our Core Principles
  • 1You Come FirstWe are a client focused business who always aim to put you first.
  • 2We are ExpertsTo provide you with the best advice, we need to know our stuff!
  • 3We are HumanWe are real people with feelings who are here to help you.
  • 4We are ProfessionalProviding a 5-star service requires a professional approach to everything we do.
  • 5We are here to EducateWe don't believe in sales, we are here to educate so you can make informed decisions.
Finalist - Moneyfacts AwardsFinalist - Cover Excellence AwardsHighly Commended - Protection Review Awards
Proud member of AMII (Association of Medical Insurers & Intermediaries)Proud member of Money Advice ServiceProud member of UnbiasedProud member of BIBA (British Insurance Brokers' Association)

If you are unhappy with our service, we have a complaints procedure, details of which are available upon request. If you are unhappy with how your complaint has been dealt with, you may be able to refer your complaint to the Financial Ombudsman Service (FOS). The FOS website is www.financial-ombudsman.org.uk.

Drewberry Ltd is registered in England and Wales. Companies House No. 06675912

Drewberry Ltd registered office: Telecom House, Preston Road, Brighton, England, BN1 6AF. Telephone 0208 432 7333

Drewberry Ltd (Financial Conduct Authority No. 505473) is an Appointed Representative of Quilter Wealth Limited and Quilter Mortgage Planning

Limited, which are authorised and regulated by the Financial Conduct Authority.

Drewberry™ uses cookies to offer you the best experience online. By continuing to use our website you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacycookie policy.