As a contractor you don't get the benefits normally provided for you as a permanent employee. These include sick pay, payouts upon death or a payout should you get a critical illness like cancer.
If you have a partner, children or other family members then you may wish to consider the following products to give you peace of mind:
- Income Protection - Monthly income if unable to work.
- Critical Illness Cover - Lump sum upon diagnosis of critical illness.
- Life Insurance - Lump sum in the event of your death.
- Private Medical Cover - Health insurance.
Our specialist advisors can offer a tailored range of specially selected 'contractor friendly' policies that reflect the unique way in which you work. This means that the protection can mirror that which you enjoyed when a permanent employee.
Fortunately, these policies are not expensive at all, and you can obtain complete cover for a few hundred pounds.
Income Protection
Whilst permies have the benefit of at least 3 months pay in the event of accident or sickness, as a contractor you are exposed to financial loss the first morning that you are unable to arrive on site, fit and ready to work. You can protect yourself against such financial hardship.
The policy to replace "sick pay" is called income Protection.
Critical Illness Cover
There is the risk that you are diagnosed with a critical illness, such as heart stroke or cancer. You can protect yourself from the potentially disastrous financial consequences of such conditions so that a lump sum is paid on the diagnosis of such an illness.
To provide this cover you need a Critical Illness Cover policy.
Life Insurance
In your last permanent job you likely would have had 'death in service benefit' of up to 4 times salary. As a contractor you have zero protection in the event of your death. If you have an outstanding mortgage then a policy covering yourself will ensure no debt is left for for a partner, kids or other family members should anything happen to you.
To replace death in service benefits you need Life Insurance.
IMPORTANT: If you already have a private life insurance policy from your permie days, this may well no longer work for you now that you are a contractor. It's important you speak to an advisor to check this.
Private Medical Cover
Many people leaving permanent employment have had the benefit of private medical insurance (health insurance) offered as part of their remuneration package.
However, as a contractor it is down to you to provide your own health insurance cover.
Health insurance puts you in control of when and where you are treated, which could mean less time away from valuable contracts and income.
For this cover you will need Private Medical Cover.