My Partner Runs a Limited Company and We Aren't Married

Yes — with the right kind of policy. If your partner is a company director, his company can pay for life insurance that benefits you, even though you are not married, through what is called a relevant life policy. The company takes the policy out on him as an employee or director, pays the premiums, and the cover is written into a discretionary trust from the outset. Because that trust can include an unmarried partner, the money can reach you.

This route matters more for an unmarried couple than for almost anyone else, because so much of what cushions a married partner is simply not there for you. There is no spouse's pension to fall back on, no automatic inheritance, and — if you have no children — no bereavement support from the state. A relevant life policy is one of the few arrangements that quietly closes part of that gap, and the company foots the bill rather than you paying for it out of taxed income.

It is not a loophole and it is not exotic. Relevant life cover is a mainstream product built for exactly this situation: a single employee's death-in-service-style benefit for a business too small to run a group scheme. The only thing you have to get right is the trust, and who it is allowed to pay.

What a relevant life policy actually is

A relevant life policy is a single-life death-in-service benefit that a company provides for one employee or director. The company owns the policy and pays the premiums; the person insured is the director; and the benefit is paid out when that person dies during the term, with terminal illness cover included on many contracts. It is written in a discretionary trust from the start, which is not an optional extra — it is central to how the whole thing works.

The point of it is to give small companies something that larger employers give through a group scheme. A big employer offers "four times salary" death in service to everyone; a one-director company or a firm with a handful of staff cannot run a group scheme, so a relevant life policy does the same job for a single named person. Compared with your partner buying ordinary personal life cover out of his own taxed income, the company route is usually more efficient, which is the reason it exists. We look at the general version of that question in whether a limited company can pay for your life cover.

How an unmarried partner gets included

Here is the part that answers your question directly. Because the policy is written in a discretionary trust, the money is not left to a named individual outright. It is held for a class of potential beneficiaries — and the standard class is drawn widely, typically covering family and dependants, which can include a cohabiting partner. When the director dies, the trustees choose whom within that class to pay.

To steer that choice, the director completes a nomination, sometimes called an expression of wish, naming you as the person he wants the money to go to. It guides the trustees rather than binding them, but in practice trustees follow a clear, current nomination unless there is a strong reason not to. The one thing to check is that the trust wording actually reaches a partner you are not married to — some standard trust forms are drafted around a spouse and named individuals, and a cohabiting partner needs to be brought expressly within the beneficiary class or named as an additional beneficiary. Get that right at outset and the arrangement does exactly what you want; overlook it and the trustees may find you are not someone they are permitted to pay at all.

Why this route matters most when you are not married

Step back and look at what a surviving unmarried partner does not get, and the value of this becomes obvious. There is no automatic inheritance — the intestacy rules pass an estate to a spouse or children, not to a cohabiting partner. If you have no children, there is no Bereavement Support Payment either, a gap we set out in why childless cohabiting couples get no bereavement support. Even a workplace pension usually pays death benefits at the scheme trustees' discretion, so that too depends on an up-to-date nomination rather than on your relationship.

A relevant life policy, written to include you, sidesteps much of that. It does not pass through his estate, so it is not caught by the intestacy rules and does not wait on probate. It reaches you as a lump sum through the trust, at the point you most need money and are least able to get at his. And if his affairs turn out to be complicated or in the red, the trust money is separate from the estate's debts — a distinction worth understanding alongside our piece on where an unmarried partner stands when the person who died was in debt.

The tax treatment, honestly

The tax position is a large part of why the relevant life structure is used, but it depends on the company's circumstances, so treat what follows as the shape of it rather than a guarantee for your case. Premiums paid by the company are normally not treated as a benefit in kind on the director, so there is usually no income tax or National Insurance charge on him for them. The premiums are also usually an allowable business expense that reduces the company's taxable profit — but only where they pass HMRC's "wholly and exclusively for the purposes of the trade" test, which is a matter of fact for the particular company.

Because the benefit is paid through a discretionary trust rather than to the director, it normally sits outside his estate for inheritance tax in the usual way trust-held policies do. What a relevant life policy is not is a business protection policy: it is not keyperson cover or shareholder protection, and it exists to benefit the director's family and dependants, not the company. The interaction of the director's roles — employer, employee and shareholder all in one person — is worth understanding, and we unpick it in life cover for a sole director wearing three hats. On the numbers and the specific tax outcome, the person to confirm it with is the company's accountant, because the answer turns on the company's own position.

The limits you need to know

A relevant life policy is deliberately narrow, and it is better to know the edges now than to discover them later. It provides life cover only, usually with terminal illness benefit, and nothing else — it cannot include critical illness cover, and it builds no surrender or investment value, so there is never anything to cash in. It must also end before a set age, commonly around 75, so it is not lifelong cover.

The most important limit for an unmarried couple is that the policy is tied to the employment. Because the company owns it, the cover generally ends if your partner stops being an employee or director — if he leaves, or the company closes. Many relevant life policies include a continuation option that lets him take the cover over personally, often without fresh medical underwriting, so plan for that in advance rather than losing the cover at a bad moment. And as with any life policy, putting it in place involves underwriting on his health; cover is offered on the insurer's terms rather than guaranteed, and the price and any conditions depend on that assessment.

Getting it set up

In practice the company applies as the employer, your partner is the life assured, and a broker arranges the policy together with the trust and the beneficiary nomination that names you. The order matters: the trust and the nomination should be dealt with as the policy is set up, not bolted on afterwards, because it is the trust that carries the money to you and keeps it out of the estate.

It is worth thinking about how much cover the arrangement should provide before you start, because the point is to replace something specific rather than to pick a round number. For most couples that means the mortgage or rent, plus enough to stand in for the income your partner brings home, for as long as you would need it. An unmarried partner has no spouse's pension and no automatic inheritance to layer on top, so the policy is often carrying more of the weight on its own than it would for a married couple with those other cushions behind them. Review the amount whenever your circumstances change — a house move, a new mortgage, a child — because a figure that was right at outset can quietly fall behind the life it is meant to protect.

Keep the paperwork somewhere the survivor can find it, too. A relevant life policy only helps if the trustees know it exists and know the nomination points to you; a policy nobody can locate is as good as no policy at all in the weeks when it is needed.

Because it pays through the trust, you are not left waiting on a grant of probate or an executor's timetable — which is exactly the wall an unmarried partner otherwise hits, as we describe in what happens when a partner's sole account is frozen and the direct debits keep going. When you are ready to look at it properly, you can get life insurance quotes and ask an FCA-authorised broker whether a relevant life policy fits your partner's company, and to make sure the trust is written so that it can actually pay you.

Scotland and Northern Ireland

Relevant life cover works across the whole of the United Kingdom, and the tax treatment is set by HMRC rather than by the devolved administrations, so the core answer does not change if your partner's company is in Scotland or Northern Ireland. The premiums, the benefit-in-kind position and the business-expense treatment are UK-wide.

What differs is the surrounding law, chiefly how trusts operate and how estates are administered. Trust law in Scotland is its own system, and the exact drafting of a discretionary trust needs to reflect that, which is a matter for the adviser setting it up rather than something that changes whether an unmarried partner can benefit. The practical answer is the same throughout the UK: a company can provide the cover, and the trust can be written so that it reaches a partner you are not married to. This article is part of our guide to dependants and unusual family shapes. For free, impartial background on life cover and putting a policy in trust, MoneyHelper is government-backed and sells nothing.

Frequently asked questions

Can a limited company pay for cover that benefits an unmarried partner?

Yes. A relevant life policy is taken out by the company on an employee or director and must be written into a discretionary trust. The trustees can pay a partner, married or not, provided that person falls within the class of beneficiaries. A nomination form completed by the director guides their decision, so make sure the trust wording reaches a cohabiting partner.

What are the tax implications?

Premiums are normally not treated as a benefit in kind for the employee, and are usually an allowable business expense, subject to HMRC's wholly and exclusively test for the trade. The payout passes through the trust rather than the estate, so it is generally outside inheritance tax in the usual way. Confirm the position for the specific company with its accountant.

What are the limits of a relevant life policy?

It provides life cover only, with terminal illness benefit on many contracts, and it must end before a set age, commonly around 75. It cannot include critical illness cover and it builds no surrender value. It ends if the employment ends, although many policies include an option to continue the cover personally, often without new underwriting.