Relevant life insurance cover for contractors
Setting up as a limited company contractor offers both freedom and potential for increased earnings. However, it’s crucial to address the financial risks associated with self-employment, particularly when it comes to protecting your family.
Relevant life insurance offers a tax-efficient way to provide a financial safety net for your loved ones, ensuring they are protected in the event of your untimely death.
What is relevant life cover?
Relevant life cover is a life insurance policy set up by your limited company to provide a tax-free lump sum to your family or financial dependents if you die, or are diagnosed with a terminal illness during the policy term.
Unlike traditional life insurance, the premiums are paid by your company and are generally considered a tax-deductible business expense.
By paying premiums through your company, you can take advantage of significant tax savings while securing a substantial lump sum for your beneficiaries. This can help cover essential expenses like mortgage payments, school fees and everyday living costs, providing your family with financial stability and peace of mind.
Protecting your future
As a director of a limited company, you enjoy the autonomy and potential financial rewards that come with being your own boss. However, this independence also means taking on the responsibility of ensuring your family’s financial security.
Have you considered what would happen to your loved ones if you were no longer around?
That’s where relevant life insurance comes in – a valuable, tax-efficient benefit designed specifically for individuals like you.
Tax efficiency: a smart financial move
One of the most compelling reasons to consider relevant life cover is its tax efficiency.
Because your limited company pays the premiums, they are typically treated as an allowable business expense. This means they are deductible against corporation tax, reducing your company’s overall tax bill.
Furthermore, the premiums are not usually considered a taxable benefit-in-kind, so you won’t have to pay income tax or National Insurance Contributions on them.
Freelancer Financials puts your policy in trust at no additional cost, so when the policy pays out, the lump sum is typically free from inheritance tax. This provides your loved ones with maximum financial support, peace of mind and future security.
Talk to our specialist protection team
Get expert advice for your specific circumstances.
Don’t put it off any longer, call 020 8421 7999 today.
A policy tailored to your specific needs
Relevant Life Cover offers flexibility, adaptability, and control, allowing you to tailor the policy to your specific circumstances.
You can choose the level of cover that best suits your family’s needs, with potential payouts of up to 25 times your annual income from salary and dividends. This generous coverage limit means you can build a substantial financial safety net for your loved ones.
Policies can be adjusted around significant life events such as having children, without requiring additional underwriting. In some cases, policies are transferable, meaning you may be able to take them with you if you switch companies or move them into your personal name.
Ready to secure your future?
Start your protection journey by filling out our simple enquiry form today:
Stage 1: Select the protection type
Stage 2: Complete brief details and one of our specialist protection insurance brokers will contact you
Eligibility criteria
It’s essential to be aware of both the benefits and limitations of a relevant life insurance policy, such as:
Eligibility through your UK registered company
To be eligible, you must be a UK resident employed by a UK business. Sole traders and partnerships typically do not qualify.
Individual coverage
Relevant life insurance policies apply to individuals, so joint cover is not available. However, if your partner also works for your company – as a company secretary for example – they can be covered under a separate policy.
No pay-out for survivable illnesses...
Relevant Life Insurance solely provides a death in service benefit and does not pay-out for any illnesses, however serious, that you survive. It is recommended that you consider separate income protection and critical illness cover to safeguard against these eventualities.
but additional medical benefits may be available
Some relevant life policies come with additional health benefits and services such as access to private GPs for quick medical consultations or second opinions for complex health matters.
Age limit
Policies generally cease when the insured person reaches age 75.
For informed decisions, get expert advice
Relevant life cover provides a smart, strategic way to protect your family’s financial future while maximising the tax benefits available to limited company contractors. It’s an investment in their security and your peace of mind.
However, navigating the world of protection insurance can be complex. Seeking professional advice an experienced advisor is crucial before making decisions about relevant life insurance or other protection policies. Our specialist protection team will assess your specific needs, explain the intricacies of different policies, and help you choose the cover that’s right for you and your family.
Quick links
Protection cover for contractors
Income protection
Critical illness protection
