Relevant Life Assurance (RLA)

Relevant Life Assurance (RLA) is a tax-efficient, employer-paid life insurance policy for employees or directors, providing a tax-free, lump-sum death-in-service benefit. It is designed for SMEs unable to justify a full group scheme, offering up to 30x income coverage without being considered a taxable benefit.

Tax Efficiency: Premiums are generally considered a business expense, reducing corporation tax, and do not trigger P11D (benefit in kind) tax for employees.

Coverage: Pays out on death or terminal illness diagnosis (life expectancy < 12 months).

Suitability: Ideal for limited company directors, SMEs, and high-earners looking to top up existing coverage.

Structure: Must be written in trust to ensure proceeds fall outside the employee’s estate for inheritance tax.

Limitations: Policies usually end at age 75, have no cash-in value, and cover ends if employment terminates.

Unlike personal life insurance, RLA is paid for by the company, meaning it does not use the employee’s post-tax income. It is specifically designed to meet the strict “relevant life” tax regulations