Relevant life insurance calculator for limited company directors

A relevant life insurance policy allows a limited company to provide individual life cover for an employee or director.

Because the company pays the premiums directly, relevant life cover can be significantly more tax-efficient than paying for a personal life insurance policy from post-tax income.

This calculator compares the estimated cost of funding a personal life policy from taxed salary with the cost of equivalent cover under a relevant life policy for the 2026/27 tax year.

Read our guide to relevant life cover here.

Please scroll down to view the assumptions used in the calculator.

Relevant life insurance cost comparison calculator

Important notes about this calculator

This is a comparison tool, not a full payroll or PAYE calculator. It uses the marginal Income Tax, employee National Insurance and Corporation Tax relief rates selected in the calculator to illustrate the potential difference in cost.

Who this calculator is for

This calculator is designed for limited company directors and employees who are considering relevant life cover provided by their employer.

Relevant life insurance is an employer-provided benefit, so sole traders cannot take out a relevant life policy for themselves.

You can learn more about relevant life cover here.

Income Tax and National Insurance

The calculator assumes that the additional salary required to fund a personal policy is taxed at the Income Tax and employee National Insurance rates you select.

Employee National Insurance is set to 2% by default, which assumes the additional earnings are above the Upper Earnings Limit. The standard employee rate below this limit is higher.

Employer National Insurance is calculated at 15%, reflecting the 2026/27 rate.

The calculator does not include the Employment Allowance. If your company is eligible to claim it and has sufficient allowance available, the actual employer National Insurance cost of additional salary may be lower.

Corporation Tax relief

You can select the Corporation Tax relief rate used in the comparison.

For a standard company with a 12-month accounting period, Corporation Tax is charged at 19% on profits up to £50,000 and 25% on profits above £250,000, with Marginal Relief applying between these limits.

The thresholds can be reduced where a company has associated companies or a short accounting period.

The calculator assumes that both the additional employment cost of funding a personal policy and the relevant life premium qualify for Corporation Tax relief at the selected rate.

Why the potential savings can be around 50%

A personal life insurance policy is normally paid for from income you have already received personally. If the company has to pay additional salary to provide the money for the premium, Income Tax and employee National Insurance may be deducted and the company may also incur employer National Insurance.

With a relevant life policy, the company pays the insurance premium directly instead.

Relevant life premiums do not normally give rise to a benefit-in-kind for the employee and may qualify as a deductible business expense for Corporation Tax purposes, subject to the normal rules.

This can make relevant life cover substantially more tax-efficient than funding equivalent personal cover from additional salary.

This calculator provides an illustration only. Actual tax treatment and savings depend on individual and company circumstances, including the tax rates that apply, entitlement to Employment Allowance and whether the relevant life premiums qualify for Corporation Tax relief. It is not a replacement for professional advice.

How to set up relevant life insurance

Our long-term partner, Broadbench, can provide a no-obligation quote and answer any questions about arranging life insurance through your limited company.

They specialise in working with company directors and have arranged policies for hundreds of our visitors.