Too Old for a Relevant Life Plan?

Yes, there is a maximum age for a relevant life policy in the UK, and it is fixed rather than a matter of one insurer's appetite. A relevant life plan has to end before your 75th birthday, because the tax rules that make these plans work only allow them to pay out on death, or terminal illness, before age 75. On top of that ceiling, every insurer sets its own maximum age for taking a new plan out, and that entry age is lower again — commonly somewhere in the sixties.

So the honest answer to "can a 62-year-old get a relevant life plan" is usually yes, but with a short runway and only if you are inside the insurer's entry limits. And the answer to "what age does a relevant life policy end" is simple: by 75, without exception, whatever the paperwork you signed seems to promise. Neither fact is a problem on its own. They become a problem when your plan for the business is to keep working into your seventies, and you assumed the company-paid cover would keep pace.

This page sets out both age limits, explains why the 75 ceiling exists, and — the part that matters most if you are reading this after a declined application or a term that came back shorter than you expected — what an owner-manager in their sixties can arrange in its place.

The short answer: the cover stops before your 75th birthday

A relevant life plan is a death-in-service style benefit that a company buys for one employee, including a director who is an employee of their own company. Like an employer's group scheme, it is designed to pay a tax-efficient lump sum to the family if that person dies while covered. And like those schemes, it carries an age at which the cover simply ends.

That age is 75. A relevant life plan cannot be written to run beyond your 75th birthday, and it cannot be renewed or extended when you reach it. Take a plan out at 60 with a 15-year term and it expires the day the term ends and you turn 75. Take one out at 62 and the longest term on offer is around 13 years, often shorter once the insurer applies its own rules. The cover does not taper and it does not convert. It stops.

This catches owner-managers because a relevant life plan is usually sold as the neat, tax-efficient answer for a company director, and the cease age is rarely the headline. It becomes the headline at exactly the wrong moment: when a 68-year-old asks to extend, or a 63-year-old is quoted a term that ends sooner than the mortgage or the business loan it was meant to sit behind.

Two different age limits, and people trip on both

There are two separate ages at work here, and confusing them is the commonest mistake.

The first is the cease age: the point at which any relevant life plan has to end, which is 75 for everyone. The second is the maximum entry age: the oldest you can be when you start a new plan, which each insurer decides for itself. Entry ages sit commonly somewhere in the sixties — one insurer might accept applications up to 65, another up to 70 — and they are a matter of the insurer's own rules, not the tax legislation.

So two different things can go wrong. You can be inside the entry age but find the available term is uselessly short, because whatever you buy still has to finish by 75. Or you can be past the insurer's entry age altogether, in which case the door is closed before the medical even begins. Someone asking whether a 62-year-old can get a relevant life plan is usually inside both limits, but the term on offer might run for ten or twelve years rather than the twenty they had pictured.

Why 75 is the ceiling

The 75 limit is not arbitrary and it is not negotiable. Relevant life plans earn their favourable tax treatment by meeting a set of statutory conditions, and one of those conditions is that benefits are payable only on death, or on terminal illness, before the age of 75. A plan that promised to pay out later would fall outside the definition and lose the very treatment that is the point of arranging cover through the company at all.

That is why no insurer will quote a relevant life plan running past your 75th birthday, however healthy you are and however much you are willing to pay. The age ceiling is a design feature written into the rules that let a company meet the premiums without the cover being taxed as a benefit in kind on you. The tax efficiency and the age limit are two sides of the same coin — you cannot keep one and drop the other.

"I'll just work until I drop": the plan that leaves a gap

Plenty of owner-managers have no intention of retiring. The business is the pension, the identity and the routine, and the honest plan is to keep going for as long as the body and the market allow. If that is you, the cease age matters more, not less.

Here is where the gap opens. A relevant life plan taken out at 60 protects your family through your sixties and into your early seventies. If you are still working at 75, still drawing an income the household depends on, and still carrying business borrowing, the cover disappears on exactly the timeline where "working until you drop" makes a sudden death most disruptive. The plan quietly assumes you will have wound down by then. A great many owner-managers have not.

It is worth being concrete about what your family would actually be left needing at that point — not only the mortgage, but the income the business threw off and the value locked up inside it. We have set out that fuller picture in what your family would actually receive for the business, which is a useful reality check before you decide how much cover you still need to carry into your seventies.

What a director in their sixties can arrange instead

If the relevant life route is closed to you, or closes too soon to be useful, the cover for your later years has to come from somewhere the 75 ceiling does not reach. In practice there are two main options, and they do different jobs.

• A personal life policy you pay for yourself. Ordinary term cover bought in your own name is not bound by the relevant life rules, so it can run to older ages, subject to the insurer's own limits and to underwriting. You pay from taxed income rather than through the company, but in exchange you can have a term that actually reaches the age you plan to keep working to.
• Whole of life cover arranged for estate purposes. Where the need is less about replacing income and more about leaving a sum to meet an inheritance tax bill, or to balance things between a child who works in the business and a child who does not, whole of life cover is built to pay out whenever death occurs rather than within a fixed term. It is usually written in trust so the money reaches the family without waiting for probate.

Which of these fits depends on what the money is actually for, and that is worth thinking through rather than defaulting to whichever is quickest. If part of the concern is passing shares cleanly to a spouse or children, the mechanics of that are covered in what happens to a husband's shares when he dies, and they can change how much cover you want and who should receive it.

You can get life insurance quotes and have an FCA-authorised broker price the options against your actual age, health and the term you need, rather than assuming the company plan will stretch to cover the years it was never allowed to reach.

Underwriting is more searching in your sixties

Age changes the medical, not just the maths. An application in your sixties is underwritten more thoroughly than the same application in your forties, because the risk is higher and the insurer wants a fuller picture before it commits. Expect detailed health questions, and be ready for the insurer to ask for a report from your GP or to arrange a medical examination.

This is true of a relevant life plan as much as any other policy — the company paying the premiums does not soften the health assessment one bit. We have explained how that works in how a relevant life plan still underwrites the director, and the short version is that acceptance, price and any exclusions all turn on your health at the point you apply, not on the fact that a business is footing the bill.

The practical consequence is plain. The healthier you are when you apply, the more straightforward it is, and the longer you leave it the harder it tends to become. It is also why reaching for a "no medical questions" plan to sidestep the process is usually a false economy for someone in this position. Those plans exist for a narrow purpose and are rarely the cover an owner-manager needs — we have set out why in why a family history is no reason to reach for a no-questions plan.

Where the cover sits, and a word on funerals

Two housekeeping points are worth settling whichever route you take. The first is the trust. Personal cover and whole of life policies are commonly written in trust so the payout does not fall into your estate and does not have to wait for probate before it reaches the people who need it. A relevant life plan is already set up to pay through a trust arrangement; a policy you buy in your own name is not, unless you put one in place when you take it out.

The second is not to muddle a life policy with a funeral plan. They solve different problems. A life policy replaces money the family loses; a funeral plan or a small over-50s policy is aimed narrowly at the cost of the funeral itself. If you are weighing up the two, whether you need a funeral plan when you already have life cover sets out where each one earns its place.

The rules on age, tax and cover for company owners sit alongside a wider set of questions about what happens to the business itself when an owner dies. Our guide to what dies with a business owner pulls those threads together, from partnerships and shares to the debts that outlive the person.

Frequently asked questions

Is there a maximum age for a relevant life policy?

Yes. The tax rules behind these plans require benefits to be payable only on death, or terminal illness, before age 75, so the cover has to end by then. Insurers also apply their own maximum age for taking a plan out, and that entry limit is lower again — often somewhere in the sixties. Both limits are worth checking before you assume company-paid cover will run as long as you need it.

What if I plan to work past 75?

The plan cannot run beyond that point, so cover for the later years has to come from a personal policy you pay for yourself, or from whole of life cover arranged for estate purposes. Putting the replacement in place while you are in good health is far easier than doing it later, because underwriting only gets more searching with age.

Can the company pay for cover on a director in their sixties?

A relevant life plan can normally still be set up if the director is an employee of the company and falls inside the insurer's entry age limits, though the term will be short and will still have to finish by 75. Underwriting is more thorough at that age, and acceptance is never guaranteed.