Reply to: Life insurance

[SueEllen]

Thanks guys, didn't realise it was more complex! Got a voicemail from Drewberry after getting the online quotes saying he can supply more contractor friendly offers. I'll give em a call tomorrow and see.

They should record your call so they don't get accused of mis-selling down the line.

You can help yourself by enquiring in writing (email) that you are a contractor, stating how your income is derived and does this cover you then keeping both your question and their written reply.

[l35kee]

Thanks guys, didn't realise it was more complex! Got a voicemail from Drewberry after getting the online quotes saying he can supply more contractor friendly offers. I'll give em a call tomorrow and see.

[SueEllen]

check that it works for contractors. A lot of these policies, whilst offering say £3k a month, will often not exceed what you take as a PAYE salary.
There are some that count dividends towards that calculation but not all.

Actually it's more complex than that.

You need to check that the insurer you end up with will cover your income not just PAYE income as a contractor.

[Lance]

Just checked that site, thanks it was really useful. Showing about £35 a month for £3k illness cover until I'm 65, I was expecting it to be a lot more than that tbh..! Better get this done asap.

check that it works for contractors. A lot of these policies, whilst offering say £3k a month, will often not exceed what you take as a PAYE salary.
There are some that count dividends towards that calculation but not all.

[l35kee]

I have just taken out life cover Via my limited company £23 per month for £300k cover till 65 years of age.
Also critical illness cover £54 a month for £2200 a month same job cover until 65. Taken them both through my limited to save on the tax and NI. I used Drewberry insurance.

Just checked that site, thanks it was really useful. Showing about £35 a month for £3k illness cover until I'm 65, I was expecting it to be a lot more than that tbh..! Better get this done asap.

[console]

I have just taken out life cover Via my limited company £23 per month for £300k cover till 65 years of age.
Also critical illness cover £54 a month for £2200 a month same job cover until 65. Taken them both through my limited to save on the tax and NI. I used Drewberry insurance.

[kaiser78]

I've just taken out some Relevant Life insurance covering £200k over 20 years for £23 per month...

[SeanT]

Definitely agree with the additive model. Also we've started getting separate policies as the amounts we're covering are getting a lot higher than when we were in our early twenties and we'd still want the kids to benefit from some after one of us croaks.

[Lance]

Best speak to an IFA. In general though you don't want to be updating existing policies as life insurance has got more costly over the years so old ones are usually better value.
I add more policies as I need them.
But you NEED an IFA who knows the market and can assess your existing policy for suitability.

[kaiser78]

RLP can be easily converted to a personal one should you close down your company in the future.

How would these be done - they are two different product types ?

[konsultant]

RLP can be easily converted to a personal one should you close down your company in the future.

[WordIsBond]

Considering the state of the market right now I'm not sure what my plans are, hence why I did it personally. I got a little worried about transferring the policy if/when I closed the company down

Some RLPs are explicitly transferrable to personal if/when no longer with the company. FWIW.

I am not sure you can put CI through the company, only life cover, unless this has recently changed.

Aviva and someone else who I forget are offering RLP CI. It's controversial, others are saying that it isn't allowable.

I wasn't necessarily saying to do CI through the company, I was talking about OP's situation and saying it might be a good idea for him to have CI, one way or another. If he doesn't do the RLP CI, he could still do CI through the company as a benefit in kind and it would probably be marginally more tax efficient, depending on other factors.

[kaiser78]

If you intend to be contracting for long, this is probably short-sighted. Doing it through the company saves you both corporation tax and dividend tax on the amount of the premium. When I got my relevant life plan it was the same cost as regular life, but much more tax efficient.

You also may want to look at Critical Illness cover. It's much more expensive but if your family is relying on you, it's a cover worth considering.

I am not sure you can put CI through the company, only life cover, unless this has recently changed.

[VillageContractor]

If you intend to be contracting for long, this is probably short-sighted. Doing it through the company saves you both corporation tax and dividend tax on the amount of the premium. When I got my relevant life plan it was the same cost as regular life, but much more tax efficient.

You also may want to look at Critical Illness cover. It's much more expensive but if your family is relying on you, it's a cover worth considering.

Considering the state of the market right now I'm not sure what my plans are, hence why I did it personally. I got a little worried about transferring the policy if/when I closed the company down

[WordIsBond]

Just traditional life policy - I don't want to complicate anything by involving the company

If you intend to be contracting for long, this is probably short-sighted. Doing it through the company saves you both corporation tax and dividend tax on the amount of the premium. When I got my relevant life plan it was the same cost as regular life, but much more tax efficient.

You also may want to look at Critical Illness cover. It's much more expensive but if your family is relying on you, it's a cover worth considering.