If she dies unexpectedly, a personally owned policy will usually form part of the estate, and HMRC says insurers will often wait for probate documents before paying. That can leave her family dealing with the business, the household and the legal process all at once.

Now take the same need for cover but arrange it as relevant life through the company and write it into trust from the start. The company pays the premium. The qualifying element can fall outside the benefits charge. No Class 1A NIC is due where the exemption applies. The trust is there to direct the proceeds to the family without relying on the estate process in the same way. The cover is still there to protect the family, but the route the money takes is cleaner and, in most cases, quicker.

Through a personal policy, he might pay around £50 per month in premiums. To fund that £50, he needs to draw income, pay tax on it, and then pay the premium. At a higher effective tax rate, the real cost from gross company income is closer to £85 per month.

Through a relevant life policy, the company pays the £50 premium directly. After corporation tax relief at 25%, the net cost to the company is around £37.50 per month. Same cover. Considerably less cost. The payout, if it were needed, would go into a discretionary trust and sit outside Barry’s estate for inheritance tax purposes.

Each premium is funded from money that has already moved through the company and into her hands. If similar cover is instead arranged as relevant life, the company pays the premium, the section 307 exemption may keep the qualifying element outside the benefits code, and no Class 1A NIC is due where the exemption applies. If it is also written in trust, the trustees rather than the estate can receive the payout, which is exactly why relevant life is often a better fit for directors with dependants.