How to set up a relevant life plan [The Essential Guide]

How to set up a relevant life plan: the trust, the wording and the documents you will need

A relevant life plan is a life policy your company buys for you, and a set of conditions that all must line up for it to be compliant with the rules and be tax efficient. The one difference that decides how you arrange it is who is responsible for spotting a problem in that paperwork, because the tax treatment people buy these policies for lives or dies on the detail.

By Natalie Brown, Senior Business Protection SpecialistUpdated September 2026 · 8 min read

Our verdict

Most directors are better off arranging a relevant life plan through a broker, and even more so if this is your first time taking out a business protection policy.

The policy itself is not complicated. The conditions around it are the part that catches people. Cover has to pay a capital sum on death before an age specified in the policy that does not exceed 75, the policy must not have or be capable of having a surrender value, the benefit must go to an individual or a charity, and tax avoidance must not be a main purpose. Get any of those wrong and you still have a perfectly valid life policy, just not a relevant life one, and the corporation tax and benefit in kind position changes with it.

The short answer

A relevant life plan is a single life death in service style policy taken out by a limited company on one of its employees or salaried directors. The company owns it and pays for it, and the payout goes to the employee’s family rather than into the business.

Through a broker

Arranging it through a broker, like IGotCover, means an adviser confirms you are eligible, compares insurers on price, benefits and wording, sizes the cover, issues the correct trust deed, supplies a board minute template, manages underwriting and keeps the file.

Direct to the insurer

Arranging it yourself means going direct to an insurer, usually through an online journey with a digital trust built in, and taking responsibility for the eligibility, the term, the sum assured and the paperwork.

The core difference

Accountability. Both routes produce a policy, but only one of them has someone whose job it is to make sure the policy is tailored to you and to spot and fix issues before they happen.

Protection brokers are usually paid by commission from the insurer rather than by a fee to you, so the premium is typically the same either way, though you should always ask any adviser how they are paid.

The order to do it in

Nine steps, in the sequence that avoids the common problems. Cover is subject to underwriting and acceptance throughout.

Confirm you are eligibleYou need an employment relationship. A salaried limited company director qualifies, as does a partner in an LLP. A sole trader does not.
Set the sum assured and the termCover is usually a multiple of total remuneration including dividends, and the term must expire before age 75.
Compare insurers with a specialist adviserPrice is only part of it. Trust wording, terminal illness definitions and underwriting appetite for your health or occupation all vary.
Apply with the company as applicantThe company is the policyholder and the payer. You are the life assured.
Execute the trust at the same timeWritten in trust from outset, not assigned later. IGotCover has a free trust writing service.
Get through underwritingA GP report, nurse screening or telephone interview may be needed, and this is usually what sets the timescale.
Pass the board minuteShort, dated and kept with the company records.
Set the direct debit from the company accountThen brief your accountant so the premiums are posted correctly.
File everything where your trustees can find itReview the cover when your income, your family or your company structure changes.

Which is right for you?

A broker usually suits you if

You have never arranged one of these and would rather the trust be checked than assumed
You have a medical history, a family history or an occupation that might attract loaded terms or exclusions
You take a small salary and larger dividends, so the sum assured needs proper evidencing
You are covering more than one person and want the paperwork done the same way each time
You are not certain whether relevant life, executive income protection or key person cover is the right answer
You want someone your family can ring at claim stage, when they will not want to be reading trust deeds

Going direct may suit you if

You do not need personal advice on whether a policy matches your specific needs
You are content to own the risk of the term, the wording and the paperwork yourself
The insurer’s online journey includes a compliant trust as part of the application
You want quotes, policy details and document management instantly online or through simple web forms
You or your family will not need help if a claim needs to be submitted

Side-by-side comparison

Comparison	Through a broker	Direct to the insurer
Eligibility confirmed	Checked before you apply, including whether relevant life is even the right product.Broker	You assess your own position.
Insurer choice	Compares different providers on price, trust wording and benefits.Broker	Whichever insurer you approached.
Sum assured	Sized against total remuneration and evidenced up front.Broker	You pick a figure and see if it is accepted.
Trust deed	Correct deed for that insurer, completed and checked.Broker, though digital trusts are sound	Often integrated into the online journey, which works well for simple cases.
Board minute	Template supplied.Broker	You or your accountant remember to do it.
Speed on a clean case	Usually a few weeks including underwriting.	Can complete in days where no medical evidence is needed.Direct, on speed alone
What it costs you	Usually nothing. Brokers are typically commission paid by the insurer.Tie, but ask how any adviser is paid	Usually nothing.
Medical evidence	Chased and managed for you.Broker	You chase your own GP surgery.
Health conditions or unusual occupations	Placed with insurers likely to accept, terms discussed.Broker	One decline and you begin again elsewhere.
Multiple employees to cover	Handled consistently across everyone.Broker	Each application repeated manually.
Changing employer later	Portability and trustee changes handled.Broker	You organise it yourself.
Support at claim	Trustees guided through the process.Broker	Your family works it out from the paperwork.
Being in full control	You work to a third party’s timescales.	Nobody between you and the insurer.Direct
Best suited to	First timers, anything non-standard, anyone wanting it checked.Depends on your circumstances	Confident directors, simple health, a process they have done before.

General comparison only, and how each route works in practice varies by insurer and by adviser. Cover is subject to underwriting and acceptance. Ask any adviser how they are paid before you proceed.

Real-world scenarios

Illustrative examples showing how the decision tends to play out. Names, businesses and figures are invented for illustration only, and are not quotes or a guarantee of cover.

Scenario A

The sole trader who could not have one

John, a 41-year-old carpenter trading as a sole trader, tried to arrange relevant life cover after reading that his company could pay for it. He had no company.

Read the full scenario

Relevant life requires an employer and an employee, and a sole trader is neither in relation to himself, so the application could not proceed.

Personal life cover written into trust was the appropriate route, and incorporating for the sake of a life policy would have been the wrong tail wagging the wrong dog.

StructureSole trader
Age41
Right routePersonal cover in trust

✔ Likely better route: a broker, who would have identified this in the first five minutes and pointed him to personal cover instead.

Scenario B

The edge case, a trust signed three months late

Holly, a director, took out £450,000 of cover and intended to complete the trust deed later, meaning to get round to it. Three months passed.

Read the full scenario

In the interim the policy sat outside trust, with the company as the only party with an interest, which is the opposite of what the arrangement is meant to achieve.

It was resolved, but it created an avoidable gap and an awkward conversation with her accountant about the treatment of the premiums already paid.

Cover£450,000
Trust signed3 months late
ResultAvoidable gap

✔ Likely better route: a broker, and the wider point is that the trust belongs with the application, not on the to do list.

The rule of thumb

The policy is the simple bit. What makes it a relevant life plan is a trust signed at outset, a term that stops before 75, and premiums leaving the company’s bank account rather than yours.

Use a broker for specialist advice and cover tailored to your business.

Frequently asked questions

What documents do I need for a relevant life plan?

Five as a minimum: the application and health declaration, the insurer’s relevant life trust deed, an expression of wishes, a board minute recording the company’s decision, and a direct debit mandate from the company account. Depending on the case you may also need trustee identity checks, evidence of your remuneration to support the sum assured, and a deed appointing additional trustees.

Does the policy have to be in trust?

In practical terms yes, and it should be done at the point of application. The benefit must be paid to or applied at the direction of an individual or a charity rather than the business, and the trust is what makes that happen. Leaving the policy outside trust, or assigning it in later, puts the tax treatment at risk and can hold up a claim considerably.

Is a board minute legally required?

No, but it is worth the five minutes. The minute records that the company agreed to take out and fund the policy and why, which supports the argument that the premiums were incurred for the purposes of the trade. If HMRC ever queries the deduction, a dated minute written at the time carries far more weight than an explanation given years later.

How long does the whole process take?

There is no set timescale for relevant life insurance. The variable is almost always underwriting. If the insurer requests a GP report, the timescale depends on how quickly your surgery responds, which can add several weeks. Cover normally begins once the policy is issued and the first premium has been collected.

Is it more expensive to use a broker?

Usually not. A broker like IGotCover can compare a panel of insurers instead of presenting a single option. Ask any adviser how they are paid before you proceed, so you know what applies to your case.

Related decision guides

Decision Guide

Relevant Life vs Personal Life Insurance

Which is better for a limited company director, and why the funding route changes the cost.

Decision Guide

Relevant Life vs Death in Service

Already have death-in-service through your company? Here is how it compares, and when you might need both.

Decision Guide

Group Life vs Relevant Life

For a small team, which employee life cover option gives you better value and flexibility?

Decision Guide

How much key person cover do you need?

Two ways to size the cover, and which figure an underwriter will actually want to see.

Want the trust checked before you sign it?

Speak to a business protection specialist at IGotCover. We will confirm whether you are eligible, compare insurers on wording as well as price, issue the correct trust deed and manage the underwriting for you. Free, and with no obligation.

Get a Free Quote →

Important information: This guide is for general information purposes only and does not constitute financial, legal, or tax advice. Tax treatment depends on individual circumstances and may change in the future. All figures and scenarios are illustrative only and do not represent a guarantee of cover, premium, or payout. Eligibility for cover is subject to insurer underwriting criteria and acceptance. You should seek advice from a qualified financial adviser and, where relevant, a solicitor or tax adviser before taking out any policy or entering into a legal agreement. Insurance provider benefits are subject to change. IGotCover is a trading name of Caspian Assured Ltd, authorised and regulated by the Financial Conduct Authority (FCA reference [FRN]).

How to set up a relevant life plan [The Essential Guide]

The alternative to death in service for one employee limited companies [Don’t Make This Mistake]

Should you get key person insurance or D&O insurance [Which Is Right For You?]

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