It’s not a subject that we like to think about but it is important to protect any dependents 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.
ContractorFinancials 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.
Contractor 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 dependents 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.
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 FSA do not regulate some forms of insurance/protection. Certain life policies have an investment element. It is important to understand that these investments are longer term in nature and that the value of investments and income from them can fall as well as rise. Past performance is also no guarantee of future performance.
Financial advice on these pages is given by Contractor Financials, which is a trading name of Contractor Financials Ltd who are regulated and authorised by the Financial Services Authority.
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