Contractor friend

Life Cover

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 by a large employer so it is vital that you put a plan into place to secure your families future should you die.

There are two main types of life insurance:

Term Cover
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.

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
The cover should be inflation proofed so that it holds its value for the life of your policy. This means that the sum paid out by the insurer upon death will be worth the same amount at that point as it is now, as it will rise with the level of inflation

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

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

It is possible for ContractorFinancials clients to protect life cover payments if they are unable to work due to illness or injury. After six months the insurer will maintain the payments so that your family or mortgage remains protected, this is called a ‘waiver of premium’.

ContractorFinancials
Contractor Financials are Independent Financial Advisors specialising in offering tailored financial solutions to contractors and freelancers, you can find out more about the services offered by ContractorFinancials by clicking here http://www.contractorfinancials.com

The value of investments may rise as well as fall and past performance is not a guide to future returns

Financial advice is given by ContractorFinancials, which is a trading name of Contractor Financials Ltd and is regulated and authorised by the Financial Services Authority.

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