Life Insurance as a contractor

[ujjain]

I guess if I ever stop contracting, it's not possible to transfer the life insurance from company owned to personal-owned either, right? Because if after 10 contracting you stop... your life insurance premium would go up massively, that'd be a great. Young people = cheaper life insurance.

[IR35 Avoider]

Surely if you are a contractor, your net worth is 300K, or will be very soon, so you can just make your dependent your beneficiary in your will? Or do they need 300K more than you want to leave them?

In any case, you only need insurance until your own assets reach the minimum amount you think your dependent will need.

(I am 51, have a family, and have never needed life insurance, and never will.)

[SueEllen]

Surely if you are a contractor, your net worth is 300K, or will be very soon, so you can just make your dependent your beneficiary in your will? Or do they need 300K more than you want to leave them?

In any case, you only need insurance until your own assets reach the minimum amount you think your dependent will need.

(I am 51, have a family, and have never needed life insurance, and never will.)

Depends what you die off.

Unfortunately not all illnesses are quick meaning you could have a year or more where you can't work and have to use some of those assets to live on.

[mudskipper]

As others have said, what you're looking for is relevant life policy.

If you are already an IPSE+ member, make sure you sign up for the free 5K cover for starters - not quite the 300K you're looking for, but better than nothing and it's included in your membership, but you do have to opt in to it.

[TheCyclingProgrammer]

My question... can my business pay for this or do I?

If its a "Relevant Life" plan then YourCo can pay for it. Otherwise you should pay for it personally and consider having it written into trust with your brother as sole beneficiary to avoid IHT issues (speak to a professional for advice).

[TheCyclingProgrammer]

I guess if I ever stop contracting, it's not possible to transfer the life insurance from company owned to personal-owned either, right? Because if after 10 contracting you stop... your life insurance premium would go up massively, that'd be a great. Young people = cheaper life insurance.

When I looked into this IIRC yes, relevant life plans can be transferred.

In the end I found the additional cost of a relevant life plan outweighed the tax savings of putting it through the company, although there wasn't much in it. I went for a personal plan instead (we have two, my wife and I have a joint decreasing term to cover off the mortgage and I also have a £400k level term 21 year policy for myself) - I pay about £20/month for each (I had quotes of half that amount but some medical background issues meant I had some premium loading issues).

[ASB]

Writing any policy into trust is sonsible (no idea if this is possible with a relevant life policy). This ensures those funds are never part of the estate.

[ujjain]

As others have said, what you're looking for is relevant life policy.

If you are already an IPSE+ member, make sure you sign up for the free 5K cover for starters - not quite the 300K you're looking for, but better than nothing and it's included in your membership, but you do have to opt in to it.

Thanks, I didn't know I had to sign up. Will look into that tomorrow, thanks!

I'll make a call to Legal&General tomorrow with the same questions I've asked here and will post back with the answers.

[ujjain]

As others have said, what you're looking for is relevant life policy.

If you are already an IPSE+ member, make sure you sign up for the free 5K cover for starters - not quite the 300K you're looking for, but better than nothing and it's included in your membership, but you do have to opt in to it.

Any way you can give me instructions how I can opt in?

[mudskipper]

Any way you can give me instructions how I can opt in?

Not sure, as I've already done it, but if you log into the IPSE site then try https://www.ipse.co.uk/futures/assurance it might be on there - IIRC I had to supply my NI number, but could bypass the DD instructions, although the site has changed since I did it. Failing that, ask on their forums and someone will hopefully steer you in the right direction.