Relevant Life Calculator

Calculating whether you could be better off with relevant life cover than a standard life insurance policy isn’t that straightforward. Our relevant life calculator below makes it easy for you to work out how much you could save.

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Calculate How Much Better Off You Will Be

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Actual Monthly Cost of Your Cover
Relevant Life Calculator
Relevant Life Calculator
Personal Net Payment ()
What you have to earn gross including tax to pay the premium ()
Relevant Life Calculator
Relevant Life Calculator
Personal Net Payment ()
What you have to earn gross including tax to pay the premium ()

Calculating Relevant Life

The relevant life calculator doesn’t just illustrate how relevant life works and what your business pays for relevant life insurance, it also informs how you would be better off in comparison to a standard life policy. 

With a standard life insurance policy, you would need to factor in the National Insurance contribution and Income Tax you would pay to fund your premium. This is alongside the employer’s cost of their National Insurance contribution minus corporation tax gives the true cost of a standard life policy.

The relevant life policy is paid by the employer, so there is no employee tax taken into consideration, or is there the company’s National Insurance contribution.

Representative Example

For example, we have base calculation on a monthly premium of £20, an income tax rate of 45% with 30 years remaining on the current policy.

On standard life

On a standard life insurance policy, you would pay £20 monthly from your personal account.

Assuming your income tax is at 45% and you pay 2% national insurance, to cover the £20 a month plus tax and NI you would be paying £37.74.

The employer would then have to pay NI at 13.8%. That’s £42.94 per month, £515 a year and £15,460 for the 30-year policy length.

On relevant life

This example with a relevant life policy would mean the company wouldn’t pay corporation tax, so the total over the 30 year policy period would be £5,760 instead of £15,460.

This results in a £9,700 saving that is put back into company profit by subtracting the relevant life rate from the standard life rate (£15,460 – £5,760 = £9,700.)

Seeing a breakdown displays that losing the tax and national insurance costs paid on a standard life insurance plan and switching to relevant life will save you thousands.

*Calculations are based on the current tax rates (as at 2018): standard rate taxpayers =12%, higher rate taxpayers = 2% and employer national insurance = 13.8%.

Relevant Life Policy Premium Benefits For an Employer:

No national insurance payments
Corporation tax relief

Relevant Life Policy Premium Benefits For An Employee

No national insurance payments
No income tax payments