Can I Keep My Relevant Life Policy If I Close My Company?
No pressure, no jargon. A short call to work out whether this cover fits your business.
Can I keep my relevant life policy if I close my company? Usually, yes. A relevant life policy can normally move to a new company you set up, move to a new employer who agrees to take it on, or convert to a personal policy, depending on your insurer's terms. What changes is who pays the premiums and whether the tax relief continues.
Key facts
- A relevant life policy is paid for by your company, so closing the company means someone else must take over the premiums.
- Most insurers let a relevant life policy move to a new employer, including a new company you set up yourself.
- Many insurers offer a conversion option to a personal policy, often without new medical questions if used within a set time.
- Corporation tax relief continues only while an employer pays; once the policy is personal, you pay from taxed income.
- If the company is dissolved before the relevant life policy is moved, the premiums stop and the cover can lapse.
What happens to a relevant life policy when a company closes?
Your company pays the premiums, and the policy relies on you being its employee. When the company closes, both of those stop, so the policy needs a new home. Plan this before you apply to close the limited company, because premiums usually leave the company bank account and stop when it shuts.
The trust needs checking too. The company is usually one of the trustees of the relevant life trust, so the remaining trustees should be confirmed, or a new employer added, before the company disappears.
What are your options when you close your company?
There are four routes, and the right one depends on what you're doing next.
Source: gov.uk corporation tax rates, 2026/27. Transfer and conversion terms vary by insurer.
Moving the policy to a new company
If you close one company and set up another, the new company can usually take over as employer and policyholder. The cover and term carry on, and the new company claims corporation tax relief on the premiums at its own rate, 25% at the main rate or 19% for small profits.
Moving the policy to a new employer
If you join another business as a director or employee, your relevant life policy can move with you, but only if the new employer agrees to take it on and pay the premiums. Raise it while your package is being agreed. Once it moves, there's still no benefit-in-kind charge for you.
Converting to a personal policy
If you retire, or your new employer won't take the policy, many insurers let you convert it to a personal policy. Used within the insurer's time limit, conversion is often done without new medical questions, so health changes since you took the cover out don't count against you. You then pay the premiums personally from taxed income, with no corporation tax relief.
This matters most if your health has changed, because applying for new cover later can mean higher premiums, exclusions or a decline. A sole trader can't hold relevant life on themselves, so if you're becoming a sole trader, conversion is the way to keep your cover.
Letting the policy lapse
If you no longer need the cover, you can stop the premiums. A relevant life policy has no surrender value, so nothing is paid back when it ends.
What should you check in your relevant life policy?
Transfer and conversion terms vary between insurers, so check your policy documents, or ask your adviser, before you close the company.
Source: Executive Life. Terms vary by insurer.
If you're still choosing a policy, these terms are worth comparing alongside the price. Our relevant life insurance comparison looks at seven UK insurers.
Executive Life is authorised and regulated by the Financial Conduct Authority (FRN 985058). We can review your current policy terms and manage the transfer or conversion for you, so speak to our team before you close the company.
Frequently asked questions
Can I keep my relevant life policy if I close my company?
Usually, yes. A relevant life policy can normally move to a new company or a new employer, or convert to a personal policy if your insurer offers that option. Arrange it before the company closes.
What happens to my relevant life policy if my company is dissolved?
The premiums stop when the company bank account closes, so the relevant life cover can lapse. Move or convert the policy before the company is dissolved.
Can I transfer my relevant life policy to a new employer?
Yes, if the new employer agrees to take it on and pay the premiums. There's still no benefit-in-kind charge for you.
Do I need new medical underwriting to convert a relevant life policy?
Often not, if you use the insurer's conversion option within its time limit. Conversion terms vary between insurers, so check your policy documents.
Can a sole trader keep a relevant life policy?
Not as a relevant life policy, because it needs an employer. A sole trader can keep the cover by converting it to a personal policy, where the insurer allows.
Last reviewed: October 2026. Next review: April 2027. Tax rates and thresholds are subject to change. This article will be updated following each HMRC Autumn Budget or Spring Statement where relevant thresholds change.
This article is for information purposes only and does not constitute financial advice. Tax treatment depends on individual circumstances and may be subject to change. Always seek professional advice before making financial decisions.
Written by
Alex Ogden DipFA | Director | Executive Life
Alex Ogden DipFA holds the Level 4 Diploma for Financial Advisers (DipFA) awarded by the Walbrook Institute London, formerly known as the London Institute of Banking & Finance (LIBF), the FCA's benchmark qualification for retail investment advisers. He is authorised by the FCA, Ref: AJO01072. View the FCA register entry.