Relevant Life Insurance vs Death in Service

What Is Death in Service?

Death in service (also called a group life scheme) is an employee benefit provided by an employer. If an employee dies while employed by the company, their family receives a lump sum — typically two to four times their annual salary. The policy is held by the employer and covers all eligible employees under a single scheme.

Death in service requires a minimum number of members (usually three to five) and is administered as a group scheme. It is common in larger businesses but less practical for small companies or sole directors.

What Is a Relevant Life Plan?

A Relevant Life Plan is an individual life insurance policy taken out by a company on behalf of a single employee or director. Like death in service, the company pays the premiums and the payout goes to the individual's family via a discretionary trust. But unlike a group scheme, it covers just one person — making it ideal for small businesses and directors.

How Do They Compare?

Which Is Better for a Company Director?

For most company directors — particularly those running small limited companies — a Relevant Life Plan is the better option. It can be set up for a single person, offers higher cover limits (up to 25 times total remuneration including dividends), and the policy can be transferred to a new employer if the director moves on.

Death in service is more suitable for businesses with a larger workforce where a group scheme makes administrative sense.

Can You Have Both?

Yes. Some directors have a Relevant Life Plan for their own cover and a group death in service scheme for their employees. The two products complement each other well — the Relevant Life Plan provides higher, more flexible cover for the director, while the group scheme provides a standard benefit for the wider team.