Contractor Life Insurance
Death is an incredibly morbid topic and not one we want to think about, especially when it involves us or our loved ones. However, life insurance is invaluable for contractors and freelancers, and it is worth investing in. Contractor life insurance gives you complete peace of mind that should the unthinkable happen, you can offer financial support to your loved ones.
The policy will settle any outstanding bills with your creditors, cover funeral expenses, and even provide an income to your dependents to replace your earnings. This is particularly important if you have a family to provide for, are the primary breadwinner or have a mortgage to pay off.
Different types of cover
There are two main types of cover available to contractors:
As the name suggests, this type of policy if only useful for a set period and the cover will expire when the policy ends. This type of cover will provide financial support to your family and dependants upon your passing during the cover period; however, once the policy expires, no protection is provided.
Term cover insurance policies will pay out a cash lump sum in the event of one of two outcomes:
- Upon diagnosis of a terminal illness
- Upon your death
The cost of this type of policy will depend mainly on the amount of cover you want to take out, and you will pay in instalments to that end.
Whole of Life Cover
A whole of life policy offers lifelong cover – just as the name suggests. Choosing this policy guarantees your dependants a payout in the event of your passing, as long as the premiums are up-to-date. Because the financial protection for your family is greater, whole of life cover is generally more expensive than term cover, but this will differ depending on your circumstances.
Get the right insurance cover for you
Whether you are working through a limited company or an umbrella company, there are insurance providers that specialise in finding the right insurance policy to suit your individual needs. Always seek advice from a specialist.
If you are a limited company director, you have the option of paying the premium for your life insurance policy out of your limited company’s pre-tax profits which is a trick many contractors often miss.
Check out our directory for Contractor Financial Service Providers
We’ve compiled a list of compliant and trustworthy contractor financial service providers which we hope you will find useful – especially when looking into contractor life insurance. These range from legal experts, to mortgage and insurance providers who can support you on your contracting journey.