Contractor Life Insurance is more commonly known as Relevant Life Cover. In this policy, contractors can save on tax but still ensures a lump sum for the family in case of death of the client. Similar to the Directors Life Insurance, a special trust fund is to be created to avoid implication and issues over taxes and inheritance during payout.
This insurance plan is also more relevant for individuals than the Death In Service Cover which is an employee benefit since such a plan is only valid during the job and is immediately voided upon completion of the contract.
The contractor client can not avail Group Life Insurance plans because of the limited number of employees. Sole contractors are also not eligible to avail of this plan without employees, especially for startup companies.
Although this plan offers more savings for contractors, the benefits for the family will only be valid during the set period of term of the policy. It does not include insurance against illnesses, terminal or critical.
However, there is another policy which is called the Executive Income Protection. Here, the payout may be claimed in case the client becomes injured or too ill to execute their responsibilities. The business itself will be owning and paying the policy.
There is a number of policies that can be included in each insurance plan for each individual. Our financial advisers are always ready to talk about these. Talk to an adviser today.