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    Business and group protection

    Relevant life plans explained

    Written by Emma Leadbetter, Editor and Copywriter, PremierPMI
    Reviewed by Muhammad Junaid, Digital Marketing Executive, PremierPMI

    Published 15 September 2026 · Last reviewed 15 September 2026 · Next review 15 December 2026 · 3 min read

    The short answer

    A relevant life plan is a single-life death-in-service policy a company takes out on one employee or director, with the benefit written in trust for their family. Tax legislation treats benefits under a relevant life policy as excluded benefits, which is why small companies use them where a group scheme is not available.

    PremierPMI is an insurance broker, authorised and regulated by the FCA (FRN 1029667). We may receive commission if you take out a policy. How we are funded.

    In this guide2 sections

    What to know about relevant life plans

    1. A relevant life plan is single-life death-in-service cover written in trust for the family. Read more
    2. Section 393B defines excluded benefits, which is the basis for the plan’s tax treatment. Read more
    3. The policy must meet specific statutory conditions to qualify for that treatment. Read more
    4. A plan written incorrectly becomes an ordinary company-owned life policy instead. Read more

    Thinking about relevant life plans

    What works well

    • Gives death-in-service cover where no group scheme exists.
    • The statutory conditions are published and checkable.
    • The trust directs the benefit to the family, not the company.

    What to watch

    • A plan not written as a relevant life policy loses the treatment.
    • There is no surrender value and no critical illness benefit.
    • The trust must be right at outset, not patched afterwards.

    What the legislation actually says

    The statutory hook is section 393B of the Income Tax (Earnings and Pensions) Act 2003, which defines "relevant benefits" and then carves out "excluded benefits" — including benefits in respect of ill-health or disablement during service, benefits on death by accident during service, and benefits under a relevant life policy. Section 393B(4) defines a relevant life policy as either an excepted group life policy within section 480 of ITTOIA 2005, or a single-life policy meeting the conditions in sections 481 and 482. Those conditions are what give the product its shape: death benefit only, no surrender value, benefits paid to an individual or a charity, and no purpose of tax avoidance. Separately, section 307 removes the residual benefit-in-kind charge from an employer’s provision of a death or retirement benefit. The practical result is a policy that looks like personal life insurance from the family’s side and like a business expense from the company’s side — but only if it is written correctly and placed in the right trust from the start. A policy that fails one of the statutory conditions is simply a company-owned life policy with a different tax outcome.

    Ask the insurer to confirm in writing that the plan is written as a relevant life policy, check the trust is completed at outset rather than later, and have your accountant confirm the company’s own position. Whatever the specifics of relevant life plans, the discipline that protects the business is always the same: record who owns the policy, who receives the money and which agreement directs it; get the insurer’s and the accountant’s position in writing; and review the arrangement whenever the people, the shareholdings or the borrowing change.

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    PremierPMI is a specialist private medical insurance broker and the publisher of The Health Guide. If you want to talk through what this means for your own cover, you can start there.

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    PremierPMI is an insurance broker, authorised and regulated by the FCA (FRN 1029667). We may receive commission if you take out a policy. How we are funded.

    Common questions

    What makes a policy count as a relevant life plan under the legislation?
    Section 393B(4) of ITEPA 2003 defines a relevant life policy as either an excepted group life policy or a single-life policy meeting conditions set out in sections 481 and 482. Those conditions shape the product: it must provide a death benefit only, carry no surrender value, pay benefits to an individual or a charity, and have no purpose of tax avoidance. If a policy fails any of these statutory conditions, it is simply a company-owned life policy and loses the relevant life treatment entirely.
    Why do small companies use relevant life plans instead of a group scheme?
    Relevant life plans provide single-life death-in-service cover for one director or employee, which suits businesses too small to meet a group scheme’s minimum member requirements. The company still pays the premium, while the benefit is written in trust so it goes directly to the employee’s family rather than the company. This gives small teams a route to protection similar to what larger employers provide through a group life scheme.[1]
    Why does the trust need to be completed at the start rather than added later?
    The relevant life plan is structured so the benefit is directed to the family through a trust from the outset, which is part of what keeps it outside the usual benefit-in-kind rules. If the trust is not put in place properly when the plan starts, the arrangement can fail to work as intended when a claim arises, regardless of how the policy itself was written. That is why the trust should be checked as completed at outset, not patched in afterwards, and kept with the company’s records.

    Sources and methodology

    1. [1] UK Parliament (legislation.gov.uk). “Income Tax (Earnings and Pensions) Act 2003, section 393B: relevant benefits and relevant life policies”. Published Enacted 6 March 2003. View source(opens in a new tab)Primary source

    We cite primary sources wherever possible. Read about our sourcing methodology.

    Written by

    Emma Leadbetter

    Editor and Copywriter, PremierPMI

    • 15 years health, finance and consumer journalism
    • PhD candidate, University of Chichester

    Emma has written across health, finance and consumer-affairs journalism for more than 15 years, and has been part of the PremierPMI team since 2022. She is known for making complex topics easy to understand, and fact-checks every guide against current insurer wording before it goes live. She is completing a PhD at the University of Chichester researching how the NHS has changed since COVID-19.

    Read full profile

    Reviewed by

    Muhammad Junaid

    Digital Marketing Executive, PremierPMI

    • Digital marketing and search
    • Financial promotions compliance review

    Junaid leads digital marketing — search, content distribution and measurement — working with the editorial and advisory teams so that every campaign points to real, compliant guidance. He reviews anything published under the brand against the same fair, clear and not-misleading standard as the rest of the site.

    Read full profile

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