Relevant life insurance calculator

This calculator compares two ways of paying for the same life cover. In the first, your company pays you enough extra salary to cover the premium after Income Tax and National Insurance, and pays employer’s National Insurance on top. In the second, the company pays the premium on a relevant life policy itself. The result is how much less the second costs the company each year, after Corporation Tax relief on each.

It uses the rates for the 2026 to 2027 tax year, which runs from 6 April 2026 to 5 April 2027. Income Tax is worked out on salary above the Personal Allowance of £12,570, which goes down by £1 for every £2 of income above £100,000. In England, Wales and Northern Ireland the first £37,700 above the allowance is taxed at 20%, income up to £125,140 at 40% and income above that at 45%.

Income Tax bands are different if you live in Scotland. Choose Scotland and the calculator uses the six Scottish rates, from the 19% starter rate on the first £3,967 above the allowance to the 48% top rate above £125,140.

Directors pay National Insurance on their annual earnings rather than on each pay period. Employee National Insurance is 8% on earnings from £12,570 to £50,270 and 2% above that. The company pays employer’s National Insurance of 15% on earnings above £5,000, even when the director runs the payroll and is the only employee.

For the financial year that started on 1 April 2026, Corporation Tax is 19% on profits up to £50,000 and 25% on profits over £250,000. In between, the main rate is reduced by marginal relief using a standard fraction of 3/200, which works out at 26.5% on each extra pound of profit. The calculator assumes a 12-month accounting period and no associated companies: the limits are lower for a shorter period or for a company with associated companies.

Salary and employer’s National Insurance count as costs before Corporation Tax. HMRC’s rule against deducting National Insurance leaves out employer’s (secondary Class 1) contributions, and doesn’t deny a deduction for gross salaries before employee National Insurance is taken off. Zurich says HMRC usually views relevant life premiums as an allowable business expense if they meet the legislative criteria, while Aviva says this must be agreed with HMRC. The calculator gives both ways of paying full relief.

Both use the premium you enter: we haven’t assumed one route costs more than the other with the insurer. The salary is taken to be your only taxable income. Everything is worked out in your browser, and the figures you enter aren’t sent to us or saved.

Insurers cap relevant life cover at a multiple of the employee’s pay, and the multiple falls with age. The table shows the most each insurer’s published multiple would allow for someone aged 40 with pay of £60,000 a year, your salary and dividends added together. It isn’t what you’d be offered: that depends on your health and the evidence of earnings the insurer asks for.

From each insurer’s policy summary, key features or adviser page, checked on 5 October 2026. Insurers can change their limits, and the documents when you apply are what count.

Some insurers also publish cash limits. Scottish Widows’ Relevant Life Cover runs from a £10,000 minimum to a maximum of £18,000,000 for level cover, and Royal London lists its amount of cover as unlimited, alongside the multiples of pay above.

Large amounts need more evidence. Legal & General asks for evidence of earnings for cover over £3,500,000, and takes any life cover the employee already has into account when it works out the maximum.

Relevant life cover is for employees, and that includes company directors. Zurich says directors, including shareholding directors, can be treated as employees for this type of policy, and Legal & General gives directors on PAYE and salaried partners as examples.

It can’t cover a business owner who isn’t an employee. Legal & General says sole traders, equity partners and equity members of an LLP aren’t eligible, although Aviva says the policy can cover their employees. If you work for yourself, see life insurance for the self-employed.

The quote forms on this site are for personal life insurance in your own name. Relevant life cover is taken out by the business, so it isn’t arranged through them.