Contractor relevant life cover specialists
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Many contractors trading via their own limited companies would love to be able to provide themselves with a Death in Service benefit, meaning any dependents would receive a cash lump sum of up to 15 times their income; if the contractor died or become terminally ill.
If you would like to find out more about relevant life insurance, or discuss your contractor mortgage requirements, please don't hesitate to call the Cleerly team on 02394 212912 or request a callback.
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The Cleerly team is dedicated to finding the right insurance plans on the market tailored to contractors and their unique financial circumstances.
Contractor relevant life insurance FAQs
There are many good reasons to take out a relevant life insurance plan, such as:
- Premiums are paid by the company, not the individual.
- Premiums are classed as a business expense and are therefore tax-deductible.
- Payouts aren't subject to inheritance tax.
- Maximum cover is typically up to £10million.
- Payouts are not judged to be a benefit in kind.
- Provides you and your family with peace of mind.
The amount of cover you can get with relevant life insurance for contractors depends on factors such as your income and age, but with most policies, you would normally expect beneficiaries to receive a tax-free lump sum of 15 times your total remuneration.
However, some insurers may offer more or less cover depending on your circumstances, so contact Cleerly today to find out how we can help find the best relevant life cover plans for you.
Relevant life insurance is different from personal life insurance in two main ways. First, relevant life cover is taken out by the contractor’s limited company, not by the contractor personally. This means that the company pays the premiums and the benefit is paid to the contractor’s family in case of death or terminal illness. Second, relevant life insurance is tax-efficient, as the premiums are deductible as a business expense and the benefit is not subject to income tax or inheritance tax. Personal life insurance, on the other hand, is paid for by the contractor after tax and the benefit may be subject to tax, depending on the circumstances.
Eligibility can differ from insurer to insurer, but generally, contractors under the age of 75 who draw income from their own limited company are eligible for relevant life insurance. This includes both sole directors and those with employees.
The maximum term for most relevant life policies is 40 years.