Death in service for the self-employed does not exist as a benefit, because death in service is something an employer arranges for its staff and a sole trader has no employer. The usual substitutes are a personal life policy you buy yourself and, if you are a director of your own limited company, a relevant life policy that the company buys for you.

Which cover suits you depends on how your business is set up. Sole traders, partners and directors each get a different answer here; to have an FCA-authorised broker phone and work through yours at no cost, request it through the form on this page.

Why is there no death in service when you work for yourself?

Legal & General’s consumer guide to death in service (24 February 2026) says you are covered only if your employer has chosen to offer the benefit, and that the self-employed do not qualify. GOV.UK’s guidance on employment status gives the reason: “Self-employed workers are not paid through PAYE, and they do not have the rights and responsibilities of an employee.” A freelancer, contractor or sole trader working alone has no scheme to join. What a scheme pays and how it compares with a personal policy is covered on the page on whether you need your own life insurance as well as death in service.

What can a sole trader or freelancer buy instead?

The nearest equivalent is a personal term policy. Among its benefits, LV= lists a lump sum paid out if you die within the term, and says you can choose between level and decreasing cover. With level cover, the amount and the premiums stay fixed for the term. The policy is yours, not tied to a client or a contract, so it carries on if your work changes.

There is one trade-off. The same LV= page says its life cover cannot be cashed in, and that “If you stop paying your premiums the cover ends, and you get nothing back.” With an employer scheme the employer pays, and with a personal policy you do.

How much to take, how insurers look at variable income and what proof of earnings they ask for are covered on life insurance for the self-employed. Whether a sole trader can set the premium against tax is answered on the page on tax and self-employed life cover. Illness and time off work are separate questions again: see critical illness cover for the self-employed and income protection for the self-employed.

How does a company director get something like death in service?

If you are a director of your own limited company, the company can take out relevant life cover on your life: Aviva’s key features (EDCO1771, January 2026) describe it as a policy a business applies for and pays for. Zurich’s key features (PW720504007, August 2025) list the cases where it may suit a firm, including a “small business without enough employees to set up a group life scheme”. How the trust, the premiums and the tax treatment work is on what relevant life insurance is, and price and limits are on what relevant life insurance costs.

The cover is for an employee, and the providers treat a director as one in certain conditions. Aviva says: “An employee can include a single director of a limited company on PAYE.” Zurich says “Company directors (including shareholding directors) and company officers can also be treated as ‘employees’ for this type of policy.” Legal & General’s technical guide, which is written for advisers rather than customers, says employees will usually include directors on PAYE and salaried partners, and that in most cases the way a person is taxed on their earnings shows whether they are employed or self-employed.

That matters if you take most of your pay as dividends. Aviva caps the amount of cover as a multiple of income, and says income “includes salary, bonus, and dividends paid in lieu of salary plus any taxable benefit in kind.” Whether a small salary topped up with dividends would be accepted for relevant life is for each insurer to say, and a broker can put that question to them on your behalf.

Which route fits how your business is set up?

The provider documents draw the line at employee status. Aviva’s key features say that “a sole trader (in their capacity as business owner), an equity partner in a partnership or a member of a limited liability partnership aren’t employees so can’t be covered under relevant life insurance.” Legal & General’s adviser guide excludes LLP members and sole traders, as owners of their own business, too.

How you workEmployer-style cover?Cover to look at
Sole trader or freelancer, no staffNo employer, so nonePersonal term cover
Sole trader with staffStaff can be covered; the owner cannot, in that capacityPersonal term cover for you
Salaried partnerUsually counted as an employee in Legal & General’s adviser guideRelevant life through the firm, or personal cover
Equity partner or LLP memberNot an employee, so outside relevant lifePersonal term cover
Director of your own limited company, paid through PAYEThe company can apply for relevant lifeRelevant life, or personal cover

Cover for the business itself, such as protecting the firm against losing an owner, is a different product; key person insurance for sole traders and partners explains it.

What if you have employees as well?

An owner who takes on staff becomes an employer, and then death in service is something the business can offer them. The costs, how it compares with relevant life and how an employer gets a quote are on death in service insurance for employers. Legal & General’s adviser guide expects its relevant life plan to be most useful to an employer with too few employees to offer a group scheme, or one that chooses not to, who wants to cover a handful of staff or perhaps only one person. Should you want a broker to see how insurers view a firm like yours, this page’s enquiry form is the route, and someone will phone you.

Frequently asked questions

Is there group life insurance for one-person businesses?

Group life is cover an employer buys for its staff: Canada Life’s, for example, lets an employer choose to cover its employees by a multiple of their salary. A sole trader working alone has nobody to put in a scheme, and for a company too small for one, Zurich suggests relevant life instead. Whether an insurer would set up group cover for a business of one is something a broker can ask insurers for you, at no charge.

Does relevant life cover count as death in service?

Not as such: it is a separate policy on one person, paid for by the company, rather than a place in a group scheme. Zurich does present it as a way to give employees death-in-service benefits above what the main company scheme pays. Choosing between personal cover and a company-paid plan is easier talked through, which a broker will gladly do on a free call arranged via the form on this page.

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