Life Insurance for Contractors

Find a cheap quote for contractor life insurance with Quotezone

Securing the right contractor life insurance can give you and your employees peace of mind.  Quotezone can lend a hand by comparing insurers.

More than 3 million customers use our comparison tool to compare insurance policies and you’ll have a range of cheap quotes for contractor life insurance within moments. Compare quotes from over 100 providers across the UK with our independent, unbiased service.

If you still have questions, read on to find out the key things to look at when taking out life insurance for contractors.

What is contractor life insurance? 

It’s also known as relevant life cover. Contractor life insurance is a policy taken out by the owner of a limited company. It pays out a lump sum upon the death of the owner, director, or employees who have been added to the policy. 

It is a type of life insurance paid for by a business, rather than by an individual. 

What are the benefits of taking out contractor life insurance? 

If you’re the business owner of a limited company, taking out contractor life insurance can offer tax savings compared with a personal policy. HMRC doesn’t view contractor life insurance as a benefit-in-kind and that means you won’t have to pay any National Insurance or income tax on your premiums. 

You can usually deduct this life insurance premium as a business expense. If you’ve lost certain benefits, such as death in service, by becoming a limited company, this type of insurance offers your employees an alternative company benefit.  

Upon the death of you or a named employee, a lump sum is paid into a pre-arranged trust, which generally means inheritance tax s avoided. 

Who is contractor life insurance for? 

It is mainly aimed at small businesses with one director or those with few employees.  

It is ideal for small companies that wouldn’t meet the criteria for a policy such as group life insurance. 

Can a spouse receive life insurance for contractors? 

Yes, a spouse can be added to a contractor’s life insurance policy if they draw a salary from the business. 

Does contractors life insurance affect your company pension? 

This type of insurance should not affect your annual pension allowance. 

What does contractor life insurance cover? 

Contractor life insurance will cover the deaths of those named on the policy (who must be under 75 years old). The term of the policy should be carefully considered.  

Critical illness cover doesn’t generally come as standard. This may require a second policy, such as executive income protection, which pays an income to you or to named staff members in the event of serious illness. 

Most insurers will offer cover of up to 30 times the named individual’s annual salary.  The maximum payout is usually around £3 million.