Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Life policy definition

What does Life policy mean? A life policy is a contract of life assurance: the insurer agrees to pay a sum or benefits on death, survival to a stated date, or other life‑contingent events, in return for premiums. Often called a life assurance policy (or life insurance policy), it is a long‑term insurance product used in private client, corporate and financing contexts. In UK financial regulation, rights under a life policy are a specified investment under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). Advising on, arranging, or dealing in such contracts are regulated activities. Typical forms include term assurance, whole‑of‑life, endowment,...

Death in service benefits: registered, relevant and excepted group life policies—eligibility, benefits, HMRC rules, and UK income tax, lifetime allowance and IHT treatment

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Practice notes

Overview of the types of death in service benefits and their tax treatment

Employers can provide three common kinds of death in service protection, often described as ‘life assurance’ or ‘life cover’, by arranging a Life policy for their staff who are eligible:

the registered group life policy
the relevant life policy
the excepted group life policy

These arrangements share the following common features and conditions:

employees eligible for cover must be aged from 16 to 74 inclusive
using a Discretionary trust will normally prevent any Inheritance tax (‘IHT’) charge arising on an employee’s death
premiums paid by the employer are usually deductible for tax
premiums are not treated as a taxable benefit in kind for employees

The registered group life policy

This is a group arrangement that is registered with HMRC under Part 4 of the Finance Act 2004 (FA 2004). It provides employers with a flexible way to meet the death in service benefits they have promised to their employees in practice. The Policy, which must be registered with HMRC as a scheme, pays lump sum benefits that become payable on the death of an employee...

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Web page updated on 21/05/2026

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