In this article we look at relevant life insurance and explain what it is, why you should consider getting it for your employees, roughly what it costs and the best place to buy it.
What is relevant life insurance?
Relevant life insurance is a life insurance policy that is bought and paid for by a company to provide a death-in-service benefit to its employees. Any proceeds arising from a death claim would be paid to the deceased employee's beneficiaries.
Why should I buy relevant life insurance?
If you are a small to medium-sized business then it can be a relatively low-cost way to enhance the benefits package that you offer your employees including company directors, whilst offering some tax benefits too. If you are a business owner, you can pay for your own relevant life insurance premiums through the business while also reducing the corporation tax bill, as relevant life insurance premiums are treated as a business expense and there is no national insurance to pay either.
What are the benefits of relevant life insurance?
Relevant life insurance can be a cost-effective way to improve your employee benefits package by offering a death benefit to your employees while at the same time helping to reduce business taxes. There is no benefit-in-kind tax payable by the employee and relevant life insurance can be more tax-efficient than group life insurance if the employee is likely to breach their pension lifetime allowance making it particularly attractive to high-earning employees. Group life schemes are registered schemes meaning that the amount of cover within them is assessed alongside your pension value which potentially could whereas relevant life insurance doesn't form part of You can read about this in more detail in our article 'What is relevant life insurance and should you have it?'
How much does relevant life insurance cost?
The cost of relevant life insurance depends on a number of factors. The cost will vary from employee to employee as it is underwritten based on the employee's age, health, smoker status and even hobbies and pastimes. It is for this reason that we wouldn't recommend using a relevant life insurance calculator (as they are not able to tailor the quote to each individual). We would recommend that you speak to an independent specialist* when gathering relevant life insurance quotes as not only will they be able to tailor the quotes to each individual, they will be able to recommend multiple insurers, meaning you can make significant savings. See below for some example quotes and further information on who you should speak to in order to get the cheapest and best relevant life insurance quotes.
The cheapest and best relevant life insurance quotes
Below we have listed the best quotes for £100,000 and £250,000 relevant life insurance for non-smokers and smokers aged between 20 and 60 (Taking them up to the age of 65). We have also indicated which insurance companies were cheapest for relevant life insurance at the time of writing but you should speak to an independent specialist as insurance companies adjust their pricing to compete for the cheapest spot quite regularly.
Cheapest and best relevant life insurance quotes for £100,000 for a non-smoker
| Age | Insurer | Cost^ |
| 20 | Aviva | £5.31 |
| 25 | Aviva | £5.80 |
| 30 | Scottish Widows | £6.93 |
| 35 | Scottish Widows | £8.29 |
| 40 | Scottish Widows | £9.77 |
| 45 | Aegon | £12.69 |
| 50 | Scottish Widows | £15.73 |
| 55 | AIG | £21.49 |
| 60 | Scottish Widows | £26.05 |
^quoted costs assume that the insured person is healthy with no personal or family history of medical conditions and does not pursue any dangerous activities
Cheapest and best relevant life insurance quotes for £100,000 for a smoker
| Age | Insurer | Cost^ |
| 20 | Aviva | £7.51 |
| 25 | Aviva | £8.65 |
| 30 | Vitality | £11.47 |
| 35 | Vitality | £14.87 |
| 40 | Aegon | £20.77 |
| 45 | Aegon | £27.58 |
| 50 | Aegon | £38.22 |
| 55 | Aegon | £51.77 |
| 60 | AIG | £64.30 |
^quoted costs assume that the insured person is healthy with no personal or family history of medical conditions and does not pursue any dangerous activities
TOP TIP: If any of your employees currently have life insurance and have given up smoking and have not had a cigarette for more than a year it is likely that they can save money on their life insurance. Check out our article 'How can I reduce my life insurance premiums?'.
Cheapest and best relevant life insurance quotes for £250,000 for a non-smoker
| Age | Insurer | Cost^ |
| 20 | Aviva | £9.00 |
| 25 | Vitality | £10.50 |
| 30 | Vitality | £13.01 |
| 35 | Vitality | £15.25 |
| 40 | Aegon | £20.40 |
| 45 | AIG | £25.92 |
| 50 | Royal London | £34.54 |
| 55 | Scottish Widows | £44.39 |
| 60 | AIG | £54.74 |
^quoted costs assume that the insured person is healthy with no personal or family history of medical conditions and does not pursue any dangerous activities
Cheapest and best relevant life insurance quotes for £250,000 for a smoker
| Age | Insurer | Cost^ |
| 20 | Aviva | £15.04 |
| 25 | Vitality | £19.90 |
| 30 | Aegon | £24.55 |
| 35 | Aegon | £32.50 |
| 40 | Aegon | £44.11 |
| 45 | Aegon | £60.46 |
| 50 | Aegon | £83.82 |
| 55 | Aegon | £117.00 |
| 60 | AIG | £142.36 |
^quoted costs assume that the insured person is healthy with no personal or family history of medical conditions and does not pursue any dangerous activities
What is the cheapest way to buy relevant life insurance?
The best way to buy relevant life insurance is to speak to an independent specialist who will be able to give you tailored quotes for each employee. A relevant life insurance specialist has access to the whole of the market, whereas online calculators may only give you quotes from a small number of relevant life insurance providers.
A relevant life insurance specialist will also be able to advise you on the level of cover, usually referred to as the sum assured, you should be taking out and even take care of the application and administration process for you. We have personally vetted the services of a relevant life insurance specialist*, having used them to set up our own business protection insurance here at Money To The Masses, and are extremely happy with the service that they provide. There is no fee as they get paid a commission by the insurance company should you decide to take out a plan and once you have received a quote, there is absolutely no obligation to proceed. Just fill out the relevant life quotation form* and they will be in touch at a time that suits you.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article - LifeSearch
