What happens if you leave your company?

If you close your limited company or stop being employed by it, your relevant life policy will usually end because the policy is owned and paid for by the company. The cover is linked to your employment, not to you personally. See what is relevant life insurance for how this structure works.

In most cases, the policy can be cancelled with no penalty, and any remaining premiums stop once the company notifies the insurer. However, if you are moving into another job where your new employer also offers a relevant life policy, you may be able to arrange new cover through them. You can read about the initial process in the setup guide.

Some insurers offer what’s known as a continuation option. This allows you to keep the same cover if you leave the business, but it becomes a personal life policy instead. Continuation is not automatic — it depends on the insurer’s terms, your health at the time, and whether new underwriting is required. For more on how the policies compare, see relevant life vs personal life insurance.

If you plan to keep your company dormant or expect to set up another business later, it’s worth checking whether you can reassign the policy or start a new one under your new company. Each provider has slightly different rules on this, and timing is important. The associated trust will also need to be updated — see trusts and relevant life policies for details.

Because relevant life cover is structured around the employer–employee relationship, you should always speak to your broker before cancelling or changing your company setup. They can explain your insurer’s continuation terms, potential tax implications, and replacement cover options if needed. For related issues, see is relevant life a business expense? and tax benefits of relevant life insurance.

If your circumstances have changed — for example, you’re moving into employment or need broader protection — consider whether a critical illness or income protection policy might now be more suitable.

Ask Broadbench about the continuation options available before you make any changes to your company or employment, or visit our FAQs and 12 key facts guides for further information.