Relevant Life Plus Your Own Cover Can Cross £500,000

Does a relevant life policy count towards the £500,000 genetic limit? The prudent answer is to assume it does. The Code that governs genetics and insurance sets its threshold by reference to the total life cover held on one person, and an employer-paid relevant life policy is life cover on your life. So it should be added to your personal cover when you work out which side of the £500,000 line you sit on — even though the two policies were almost certainly arranged separately, and neither application asked about the other.

That is how a director ends up over the threshold without ever deciding to. You take out personal cover for the mortgage one year. A while later, on your accountant's suggestion, the company sets up a relevant life policy as a tax-efficient death-in-service benefit. Each looks modest on its own. Added together, they can pass £500,000 quietly, and nobody in either conversation mentions the other, because the two sit in different files with different advisers.

Before anyone panics, the honest headline is that crossing this particular line changes almost nothing for almost everyone. But it is worth understanding what the threshold is, why a relevant life policy stacks onto it, and the one narrow situation in which it has any practical effect at all.

What a relevant life policy is

A relevant life policy is a single-life term assurance that an employer takes out and pays for on the life of an employee — very often a director of a small company that has no group death-in-service scheme. It pays a lump sum if that person dies during the policy term, into a discretionary trust set up at the outset, which then distributes to their family.

Its appeal is largely about tax and structure. The premiums are normally treated as an allowable business expense for the company rather than as a taxable benefit in the employee's hands, and because the payout goes through a trust it is generally free of income tax and usually falls outside the employee's estate for inheritance tax. That last point — how a policy in trust sits outside the estate — is worth understanding properly, and we set it out in why a life payout can be taxed at 40% and how a trust prevents it. The sum assured is typically set as a multiple of remuneration, which is where the figure can climb higher than people expect; how those multiples are calculated, and what counts as remuneration, is covered in whether bonus and commission count towards a death-in-service multiple.

Not everyone can have one — it is an employer arrangement, so the structure has to be right — and the eligibility question trips people up, which we deal with in whether a sole trader can have a relevant life policy. The key fact for this page is simpler: whatever the sum assured is, it is cover on your life, and that is what the threshold counts.

The £500,000 line, and what sits above it

The Code on Genetic Testing and Insurance draws one hard line in an otherwise protective picture. Below it, no predictive genetic result can be asked for or used at all. Above it, exactly one can: a predictive test result for Huntington's disease. That is the whole of what changes at the threshold — one condition, one result, and nothing else.

Source: Code on Genetic Testing and Insurance, HM Government and the Association of British Insurers, published on gov.uk. The threshold above which a predictive Huntington's disease result may be asked about is £500,000 of life cover on the individual.

It is worth being precise about how narrow that is. The threshold does not unlock your family history, your medical records, or any other genetic test. It does not make BRCA, or a cardiac gene, or an ancestry-kit variant askable — those stay protected at every level of cover. The single thing that becomes possible above £500,000 is a question about a predictive Huntington's test, a test the overwhelming majority of applicants have never had and never will.

Does a relevant life policy count towards it?

The Code frames its threshold around the amount of life cover on an individual, not around a single policy. Read that way, two policies on the same life are added together, and a relevant life policy — which insures your life, even though your employer pays and a trust receives — is part of that total. This is why the prudent working assumption is that it counts.

"Prudent working assumption" is the honest phrase, because aggregation is handled by insurers rather than spelled out for every arrangement, and practice can vary. If the answer genuinely matters to you — because there is Huntington's disease in your family and you have thought about testing, which is the only scenario in which it bites — do not guess. Ask each insurer, in writing, how it aggregates cover held on the same life, and keep the replies. That converts an assumption into something you can rely on, and it is a reasonable question that a broker can put on your behalf.

The same logic reaches beyond relevant life policies. If your employer provides a group death-in-service benefit as well, that is also cover on your life, and on the same cautious reading it forms part of the total the threshold looks at. So a person could hold personal cover, a group scheme through a larger employer, and a relevant life policy through a side company, and only by adding all three together get a true picture of where they stand against the line. The practical takeaway is the same in every case: the threshold cares about the person, not the policy, so it is the sum of everything on your life that counts — which is precisely the figure no single application ever asks you to total up.

How a director crosses the line without noticing

The trap is not really about the numbers; it is about the seams between separate decisions. Personal life cover is usually arranged around a life event — a mortgage, a new baby — and sized against that need. A relevant life policy is arranged around the business, often years apart, through the company's accountant or a different adviser, and sized as a multiple of pay. Neither process is designed to notice the other, because from each side the other policy is invisible.

So the arithmetic assembles itself out of sight. Personal cover taken out for a mortgage, plus a relevant life policy worth several times salary, can pass £500,000 without either application ever mentioning the other. The applicant is not concealing anything; they simply have two policies that were never looked at together, and no single form ever asked the question that would have added them up. For most people this is a harmless accounting curiosity. It only becomes something to think about where the genetic threshold interacts with a real family risk.

Why crossing it matters less than it sounds

It is easy to read "you have crossed the genetic threshold" as ominous. It is not, for three reasons worth stating plainly.

First, the only thing above the line is a single question about a single condition. If you have no Huntington's disease in your family and have never had a predictive test for it — which describes almost everyone — there is simply nothing for the question to reach, and crossing the threshold has no effect on you whatsoever.

Second, family history questions were never governed by this threshold in the first place. An insurer can ask how many of your close relatives had heart disease or cancer, and at what ages, at any level of cover at all. If you have worried that a company policy tipping you over £500,000 somehow exposes your whole family tree, it does not — that information was always askable, and it is not a genetic test. What "family history" even means on a form is a separate and useful thing to get right, and we unpick it in the two definitions of a family history of cancer.

Third, the protections below the line remain fully in force for the personal-cover portion and for every other genetic result you might have. The threshold does not retroactively strip anything away; it adds one narrow question at the top end and leaves the rest of the Code intact.

What to do about it

For most directors the correct action is none: note that your combined cover may sit above £500,000, understand that this only concerns a Huntington's test you have almost certainly never had, and move on. The threshold is a technicality for you, not a problem.

The exception is the person for whom it is real — someone with Huntington's disease in the family who is weighing up a predictive test. If that is you, the sequence matters, and it is worth taking advice before either testing or applying, because the interaction of cover levels and a predictive result is exactly the kind of thing to plan rather than stumble into. More generally, if you want to understand how inherited risk, the odds and the insurance rules fit together, our guide to family history, inherited risk and the odds draws the threads together, and the blunt statistical backdrop of what actually threatens men of working age is laid out in what actually kills men in their 40s in the UK. When you want to see real terms against your own circumstances — personal cover, company cover, or both — you can get life insurance quotes and have an FCA-authorised broker work through the aggregation with the insurers directly.

Scotland and Northern Ireland

None of this changes at the border. The Code on Genetic Testing and Insurance is a single UK-wide agreement, so the £500,000 threshold and the Huntington's exception apply identically in Scotland, Wales, England and Northern Ireland, and a relevant life policy aggregates the same way wherever the company and the employee are based. The trust and tax structure around a relevant life policy also works across the UK, though the detail of estate administration differs in Scotland and Northern Ireland, which is a reason to have the trust set up properly rather than as an afterthought.

Frequently asked questions

Does a relevant life policy count towards the £500,000 threshold?

The Code's threshold refers to life cover on an individual, so the prudent assumption is that an employer-paid relevant life policy on your life counts alongside your personal cover. If crossing the line matters to you — which in practice means only where Huntington's disease is in your family — ask both insurers in writing to confirm how they aggregate cover on the same life.

Why would a director cross the threshold without noticing?

Because the two policies are arranged at different times, by different people and often through different advisers. Personal cover taken out for the mortgage, plus a relevant life policy worth several times salary, can pass £500,000 without either application ever mentioning the other. No single form adds them together, so the total assembles itself unseen.

What actually happens above the threshold?

Only that a predictive Huntington's disease test result may be asked about. No other genetic result becomes askable, and nothing changes for family history questions, which insurers may ask at any level of cover. For almost everyone — anyone without Huntington's in the family and without such a test — crossing the line has no practical effect at all.