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Ensuring you continue to get paid if you suffer a serious accident or illness
Unlike permanent employees contractors do not receive sick pay, so if they don’t work they don’t get paid. Contractor income protection replaces income lost through periods of incapacity due to an accident or illness. It pays out a pre-agreed monthly amount after a defined waiting period, allowing a contractor and their family to look to maintain as close as possible their existing standard of living.
Note: The policy isn’t designed to pay out for when an insured person suffers from a cold or has a few days off working, it’s there for the serious life impacting issues.
Many contractors believe that they don’t need contractor income protection due to having savings that they’ve build up over time, but being unable to work for months or years will eat into those savings and very likely use them up.
The money is paid to the contractors business so it can pay the contractor, ensuring in turn that they can pay their mortgage, bills, credit commitments and groceries etc. Running out of money to pay those items can have a hugely detrimental affect that can take years to financially recover from.
The policy pays out a pre-agreed financial amount each month in the event of the insured meeting the policy definitions of a serious accident or illness. There are a range of options for the waiting period before payments are made, with the longer the waiting period the cheaper the premium.
Contractor Income Protection is paid for directly by the limited company and is a wholly allowable expense. This makes it highhly tax efficient by both reducing the Corporation Tax bill and also not having to personally pay it from your own pocket after the deduction of applicable taxes.
All of our Contractor Income Protection Life policies are designed to the exact needs of contractors, they’re not generic off-the-shelf policies. You’ll get tailored advice from our team of expert advisors, with the product being provided by fellow Vestura Group company The Mortgage Lodge.
Our expert advisors understand contractors and their earning patterns. We take into consideration both salary and dividends, the anticipated retirement age, inflation, and all of the other nuances that go with providing your services as a contractor via a limited company.
Coverage can be provided for up to 80% of the salary and dividend drawdown, including pension and NI contributions, and also the partners dividend drawdown from the company (on the assumption they don’t generate profit and wouldn’t create revenue in the contractors absence).
There are a range of types of premium that can be selected, which alter the amount the limited company pays each month. Options include; Reviewable premiums, age-anded premiums and guaranteed premiums. So no matter your preference we’ve options to suit your precise requirements.
As the name of the product suggests…. contractors! It’s aimed specifically at small business owners where due to the small number of employees, such as single person or husband & wife Personal Service Company (PSC) a group life scheme isn’t warranted.
As already mentioned on this page there are numerous benefits to a contractor relevant life cover policy, including:
This is a decision that only you can make, and one that needs to be discussed with an expert advisor based on your requirements should the worst happen. The policy pays out a pre-agreed monthly amount, once the pre-agreed waiting time has expired. The precise amount of cover will be worked out with the advisor based on your requirements and earning structure.