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Relevant Life sum assured limits – how insurers compare

Relevant Life sum assured limits – how insurers compare

In reading this article you will understand

  • The maximum sums assured providers allow on relevant life plans
  • The income sources that can be taken into account
  • How providers approaches differ across the age ranges

The sum assured is the heart of any life insurance policy. As the amount that is paid out to loved ones upon the death of the life assured, it is really what life cover is all about. The payout will be based on a multiple of the life assured’s income, so for advisers helping business owners to set up policies for their staff, it is important that the cover reflects as full a picture of the life assured’s earnings as possible.

In this insight, we look at the maximum sum assured that providers of relevant life cover will offer, depending on age, and the various types of income they will accept when calculating sums assured.

Insurers calculate the maximum sum assured depending on the income and age of the life assured. Salaries can be made up of various elements such as Pay As You Earn (PAYE), bonuses and dividends, and employers can also include other incentives such as company cars or mileage allowances and so forth. When calculating the maximum sum assured, insurers take a view on whether they will allow each form of income to count.

As our chart shows, all insurers that have provided data on their maximum sum assured limits take PAYE into account. PAYE is how most employees pay income tax, which is perhaps why some insurers – LV=, Royal London and VitalityLife – can insist on PAYE earnings as a requirement in their salary calculations without affecting their appeal to clients. However, clients who are looking to cover those who are receiving dividends or commission only will need to choose a different provider.

Regular bonuses, commission, dividends, overtime and P11D benefits are also taken into account by all the insurers that have supplied data. P11D benefits (benefits in kind) are work-related taxable expenses and taxable benefits such as company cars, expenses payments, living accommodation, childcare costs and private medical insurance.

Data from HM Revenue & Customs published in 2019 shows that in the 2016/17 tax year, 3.66 people received taxable benefits in kind. This is the latest data available, as changes to reporting requirements for benefits in kind since the 2017/18 tax year means that statistics are now available only for company cars rather than the full range of benefits.

Our table shows the majority of insurers will accept irregular/ad-hoc bonuses in their salary calculations but Royal London are the exceptions as they will not take this form of income into account.  However, income is not the only criteria which matters in relation to the sum assured – age is also important.

Some insurers do not provide relevant life cover to 16-year-olds so employers that want to cover their youngest staff will not be able to use plans from AIG, Aviva, Legal & General, LV= and Royal London. Of those providers who do cover 16-year olds, Zurich and VitalityLife offer high maximum sum assured at 25 and 30 times salary respectively.

Looking at age 17, a few more providers are in the market, with AIG providing the highest maximum sum assured at 35 times salary. This remains the highest maximum assured across all insurers up to and including age 29.

By age 18, all providers that have supplied data are active in the market, so employers have more choice. The maximum sum assured ranges from 25 to 35 times salary across the market for employees in their 20s, with the highest from AIG and the lowest from Legal & General, LV= and VitalityLife.

The picture changes where staff are in their 30s, as AIG lowers its maximum sum assured to 30 times salary, the highest available. As our table shows, this puts AIG on a par with Royal London and Zurich.

Maximum sum assured as a multiple of earnings for clients in their 30s
Age AIG Aviva Legal & General LV= Royal London VitalityLife Zurich
30 30 27 25 25 30 25 30
31 30 27 25 25 30 25 30
32 30 27 25 25 30 25 30
33 30 27 25 25 30 25 30
34 30 27 25 25 30 25 30
35 30 27 25 25 30 20 30
36 30 21 25 25 30 20 30
37 30 21 25 25 30 20 30
38 30 21 25 25 30 20 30
39 30 21 25 25 30 20 30


Between age 30 and 34, the lowest maximum sum assured across the market is 25 times salary but from age 35, this falls to 20 times salary due to VitalityLife introducing a reduction in multiple at this point.

Maximum sum assured as a multiple of earnings for clients in their 40s
Age AIG Aviva Legal & General LV= Royal London VitalityLife Zurich
40 25 21 25 20 25 20 20
41 25 21 25 20 25 20 20
42 25 21 25 20 25 20 20
43 25 21 25 20 25 20 20
44 25 21 25 20 25 20 20
45 25 21 25 20 25 20 20
46 25 15 25 20 25 20 20
47 25 15 25 20 25 20 20
48 25 15 25 20 25 20 20
49 25 15 25 20 25 20 20


For employees and directors in their 40s, 25 times salary remains the highest maximum sum assured available in the market and is available from AIG, Legal & General and Royal London. At 20 times salary, LV=, VitalityLife and Zurich offer the lowest multiples to those in their early to mid-40s. However, at age 46, Aviva drops its multiples from 21 times salary to just 15 times salary.

Maxumum sum assured as a multiple of earnings for clients in their 50s
Age AIG Aviva Legal & General  LV= Royal London VitalityLife Zurich
50 20 15 20 20 20 20 15
51 20 15 20 20 20 20 15
52 20 15 20 20 20 20 15
53 20 15 20 20 20 20 15
54 20 15 20 20 20 20 15
55 20 15 20 20 20 20 15
56 20 10 20 20 20 20 15
57 20 10 20 20 20 20 15
58 20 10 20 20 20 20 15
59 20 10 20 20 20 20 15

By age 50, there are fewer differences in the maximum sum assured between providers. The majority of companies provide 20 times salary, with Aviva and Zurich the exceptions at 15 times salary. However, more variation between providers comes in at age 56, when Aviva reduces its multiples from 15 times salary to 10 times salary.

The vast majority of providers offer a maximum sum assured of 15 times salary or lower by age 60. Only one provider – VitalityLife – exceeds this at 20 times salary and this level is offered right up until the plan’s maximum buying age of 74. This plan appears more competitive for older directors or employees than younger ones.

Most providers a maximum sum assured of 15 times salary to those in their 70s but choice of insurer is more limited for this age bracket. The lowest multiple is offered by Aviva, which at 10 times salary is less half that of the highest multiple from VitalityLife.

Overall, AIG is the standout provider. Along with Aviva, L&G and Zurich, it has the widest criteria for income calculations, accepting all sources of income as the basis for salary multiples, with no requirements for PAYE. It also provides the highest salary multiple for those in their 20s and is among those offering the highest multiples for other age groups up to age 60.

After age 60, VitalityLife becomes more competitive and the insurer deserves credit for maintaining this multiple until cover expires after age 74.

Things to reflect on for CPD:

  • What three things have you learnt from this article and how will you use them in your conversations
  • Which provider’s limits would best suit the demographics of your business clients and why?
  • What other client circumstances would influence your recommendation of the most suitable RLP plan?

About The Author


As well as writing for Protection Guru, Amanda Newman Smith is the feature writer at adviser trade publication Money Marketing. She started her career at a local newspaper in London and has been writing about protection products since 2000. In her previous role at Money Marketing she specialised in analysis of new financial products, including those in the protection market. Having recently become interested in antiques, Amanda spends her free time with her husband and their three children, hunting for unloved pieces to restore to their former glory.

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