is Relevant Life Cover/Plan (RLC/RLP) any good?

[firstTimeNewbie]

Hello,

Just wondering if it's more beneficial to purchase Relevant Life Cover (RLC) for a contractor rather than a personal Life Insurance and also whether they're mutually exclusive at all... ?

I know that an RLC is an obviously more tax efficient for many reasons incl. paying from your ltd company and classified as a business deductible expense etc.
Downsides are that It doesn't contain Critical Illness Cover or Income Protection - so effectively, it is a death in a service insurance policy.

So based on that, one could argue that if you buy this RLC then you don't need personal life cover. But just Critical Illness Cover and/or income protection if want to.
Or buy your various insurances via your personal money and not RLC?
Or even buy both RLC & Personal Life Insurance + Critical Illness Cover + Income Protection.

So options I'm thinking are:
1) Just RLC
2) RLC + Critical Illness Cover &/|| Income Protection
3) Personal Life Insurance and/or Critical Illness Cover and/or Income Protection
4) Buy them all (RLC + Personal Life Insurance + Critical Illness Cover + Income Protection etc..) since RLC is just a kind of Death in Service benefit right?

What do you guys think? What's considered a good approach?

[Craig@Clarity]

Do you have an IFA you could speak to perhaps who could give you best advice? I can refer you to one that we associate with if you want to have a free chat with them.

[Spoiler]

I've recently revisited my insurance and got the following put in place:

Separate RL insurance policies for myself/partner (both directors/employees of Ltd) paid for by Ltd.
Income protection: paid for personally
Joint life insurance: paid for personally (covers the mortgage term)

Am defo worth more dead

(Happy to point you to someone who sorted this out for me !)

[firstTimeNewbie]

Do you have an IFA you could speak to perhaps who could give you best advice? I can refer you to one that we associate with if you want to have a free chat with them.

I been speaking to an IFA and also speaking to other insurance advisors but they are not contractors like most people are here so they don't understand the thinkings of an contractor. They only offer the best financial option based on your circumstance.

But I also want to gather ideas and views from the wider contracting community to see what's been commonly done...

[firstTimeNewbie]

I've recently revisited my insurance and got the following put in place:

Separate RL insurance policies for myself/partner (both directors/employees of Ltd) paid for by Ltd.
Income protection: paid for personally
Joint life insurance: paid for personally (covers the mortgage term)

Am defo worth more dead

(Happy to point you to someone who sorted this out for me !)

I was actually thinking of something simlar to what you've done (although for me it would be for myself time being as I don't have a wife yet).
An insurance advisor recently actually suggested what you've done to me saying that it's best to buy a whole bit of everything so you're covered.

Where did you buy your RL insurance policies from?

[Lance]

lThey only offer the best financial option based on your circumstance.

I am really struggling to see why you think that is a negative point.

[Spoiler]

Where did you buy your RL insurance policies from?

I did it all through Drewberry Insurance (Sam Barr-Worsfold) - the policies are with different insurers. Would recommend you get in touch with them if you're unsure what you want/need. They understand Contractors/Ltd setup, put the policies into trust, etc. All good.

[GordonHunterSuperContract]

A Relevant Life plan is an allowable business expense. This means that you can claim back the annual corporation tax on the benefit you receive, and you will not pay any benefit in kind. What is also great about Relevant Life plan is that when your adviser sets the policy up into a Legal Trust then you can switch the plan if there is a change in circumstances to your Ltd company or you are offered an employed job. You can also change the beneficiaries at any time throughout the contract.

The only downsides are that you cannot have a Joint Relevant Life Plan so if you are only looking for mortgage cover for a couple then this is not the cover for you.

We suggest to EVERY self-employed worker/contractor that they should have a Relevant Life plan. Most employed workers will have a Death in Service Plan with their employers and this is a way for Self Employed people to get the same benefit in a very taxable way.