It’s not a subject that we like to think about but it is important to protect any dependants in the event of the worst.
As a Contractor you miss out on the life cover offered a large employer so it is vital that you put a plan into place to secure your families future should you die.
Freelancer Financials specialise in finding the right insurance to suit your individual needs as a Contractor and provide this essential cover at an affordable price. There are two main types of life insurance:
Term cover offers an inexpensive protection policy that lasts for a given period and will end when the agreed term is finished.
Whole of life Cover
If you want to cover yourself for death at any age then a Whole of Life policy could be the answer. Despite being slightly more expensive than a Term cover policy, it is often popular with contractors because of the long-term cover that it provides.
Freelancer Financials offers a variety of life cover policies which can be used in various ways:
Level term assurance plan
Pays a set lump sum to your dependants that they can then invest to gain an income. The value of this lump sum can be affected by external influences such as interest rates or inflation that reduce the amount of income.
Covers you for the period in your life i.e. for when you have dependent children (e.g. until they are 18 or 21).
Saves your family from being left with your debts by protecting loans or a mortgage.
Decreasing term assurance plan
Pays a steadily reducing lump sum depending on when death occurs through the term of the plan. Can be used to provide funds to help settle a repayment mortgage if you die.
Relevant Life Cover
A Relevant Life Policy is a tax-efficient way for contractors and self-employed company directors to get their personal life cover paid for by the business, as a company expense.
By switching to a relevant life policy the premiums can be paid by your company instead of by you personally, saving significant amounts of income tax, employee’s NI, employers NI and also benefiting from corporation tax relief. Payments made by the company will not be treated as a P11D benefit.
Family income benefit plan
This policy will provide a set income over a pre-determined term so that your family will have help with the bills etc.
Your total payout will differ according to how far into your policy you are i.e. if you claim early on then the overall payment will be larger than if you claim at the end of the policy because the number of annual payments made would be less. If you are looking for a set lump sum regardless of when a claim is made then a level term may be better suited to your needs.
Avoids the need for relatives to worry about investment of a lump sum.
Whole of life policy
This life insurance covers you for the whole of your life and is useful if you don’t want a policy to have an end date. The policy can be backed up by investments that build up over the life of the policy to ensure that premiums are kept more manageable as you get older.
Prices can be competitive if you take the policy out early and with an investment linked plan you have the option to take out a cash lump sum if the plan is cashed before you die. Please note that investment plans can increase and decrease in value throughout the life of the policy.
The value of investments may fall as well as rise and past performance is not a guide to future returns.
Your home maybe repossessed if you do not keep up repayments on your mortgage.
Financial advice is given by Freelancer Financials, which is a trading name of Mortgage Quest Ltd and is regulated and authorised by the Financial Conduct Authority.