Despite being a topic most of us would rather avoid talking about, it is important to plan ahead to protect your dependants in case something happens to you.

Unlike 'permies', who may have a life cover scheme provided by their employer, contractors are responsible for arranging all of their financial affairs on their own. This includes putting plans in place to look after your family should you die.

Our long-term IFA partner, Contractor Financials, have helped produce this guide to life cover, and can provide you with a personal quote if you fill in the form at the end of this article.

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 Freelancers because of the long-term cover that it provides.

Contractor Financials can recommend 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 a 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 predetermined 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.

Get a Contractor Life Cover Quote

Contractor Financials are Independent Financial Advisers regulated by the FSA so they are able to search the whole of the market to find the best cover for your needs. They only work with insurers that have a history of paying claims and offer an affordable cover for Contractors for the duration of the policy.

To find out more fill in our protection finder below:

Contractor Life Cover Protection Enquiry Form

(* = Required Field)

Your Name*
E-mail*
Phone
Mobile
Date of Birth
Sex	Male Female
Smoker?	No Yes
Cover Required (Check one box)	LTA (Level Term Assurance) DTA (Decreasing Term Assurance) WOL (Whole Of Life) FIB (Family Income Benefit)
Amount of Cover Required (In 000's)	250 200 150 100 75 50 25 Other
Term (In Years)	25 20 15 10 5 Other / Whole of Life
Inflation Proofed?	No Yes
Waiver of premium?	No Yes
If joint cover is required, please enter partner's details below, else click on "Submit".
Partner's Name
Date of Birth
Sex	Male Female
Smoker?	No Yes
Waiver of premium?	No Yes
Comments

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

All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.