Critical Illness Insurance for Contractors: Protect Yourself When It Matters Most

As a contractor, your income stops when you can’t work. Critical illness insurance ensures you’re financially protected if you're diagnosed with a serious illness by paying out a lump sum—unlike life insurance, which only pays on death. This tax-free payout can cover your mortgage, medical bills, or living expenses, helping you focus on recovery without financial stress.

Why Contractors Need It:

• Immediate Financial Relief: Get a tax-free lump sum when you’re diagnosed with a covered illness, providing vital financial support when you need it most.
• Tailored for Your Needs: Use the payout to cover unexpected costs like medical treatments, mortgages, or home adjustments after a life-altering diagnosis.
• Covers Many Conditions: Policies typically cover 40-99 serious conditions, ensuring wide-ranging protection.
• Security for Your Family: Gives you peace of mind knowing your loved ones are supported during tough times.

How It Works:

Your contractor lifestyle can put pressure on your health—stress, long hours, and tight deadlines can take their toll. Critical illness insurance steps in when these pressures lead to serious illness, offering a financial safety net while you recover.

For a regular monthly premium, you’ll receive a lump sum upon diagnosis. Unlike income protection, which stops when you’re well, this payout is yours to keep, helping you rebuild your life.

Why we’ve partnered with Broadbench Ltd

Navigating critical illness cover can be complicated. That’s why we recommend Broadbench. Their expert advisers specialise in contractor-specific solutions, offering whole-of-market advice tailored to your unique needs. From risk mitigation to tax efficiency, they simplify the process, ensuring you get the right coverage without the hassle. And the best part? There are no fees for their service—Broadbench is paid by the insurance provider if you choose a product.

Key Considerations:

• Coverage Clarity: Ensure the medical definitions in your policy are clear and comprehensive.
• Provider Reputation: Choose an insurer with a proven track record of paying claims.
• Affordability: Make sure your premiums stay affordable as you age.
• Flexible Cover: Opt for fixed or reducing cover, depending on your future plans and financial liabilities.

What Are The Chances?

What’s the likelihood of getting a serious illness? Many contractors ask this and the truth is that approximately 1 in 5 men, and 1 in 6 women, will suffer a long-term illness in their lifetime. The average age for critical illness claims is only 47 years old.

Protect your health and financial future—secure critical illness insurance today and keep your focus where it belongs: on getting better.

Why Apply for Insurance Through ContractorUK?

At Contractor UK, we understand the unique challenges contractors face, especially when it comes to financial security. That’s why we’ve partnered with Broadbench to offer our members specialised, independent financial advice tailored specifically for contractors.

Here’s why applying through Contractor UK is the smart choice:

• Contractor-Specific Expertise: Broadbench specialises in finding insurance that meets your unique needs as a contractor, ensuring you get essential cover at an affordable price.
• Proven Track Record: Thousands of contractors have trusted Broadbench to protect their families and secure their future.
• Tailored Life Cover: Broadbench advisers offer a range of life insurance policies that can be customised to suit your individual needs.
• Independent Financial Advice: As independent advisers, Broadbench searches the entire market to find the best coverage options for you.
• Trusted Providers: They only work with insurers known for reliable claims payouts and long-term affordability throughout your contracting career.

Partnering with Broadbench means you’ll get expert guidance and insurance that truly protects what matters most. Apply through Contractor UK and ensure your financial security today.

For more detailed information and to book a no-obligation Welcome Call please fill in the form below.

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What Is Key Person Insurance?

Many businesses find that certain key individuals are responsible for a significant proportion of their profits. Losing one of them can have a serious impact on the health of the business.

Did you know that 50% of small businesses fail within the first five years of operation? Of those that fail, 42% cite the unexpected loss of a key person as the primary reason*.

But there’s a solution - with Key Person cover, you can mitigate the impact of their absence. If the key person were to die or suffer from a severe illness, the policy pays a cash lump sum to make up for any loss in revenue or profits, thereby keeping the business on track. Don’t leave the future of your business to chance. Key Person Insurance is designed for small businesses that rely heavily on the expertise of a few key individuals. Invest in the security of your business today.

* Data sourced from the National Small Business Association survey

Why Consider Key Person Insurance?

Could you be putting the future of your contractor business in jeopardy by not having Key Person Insurance in place? The shock of losing someone crucial to your business is enough on its own, let alone considering the effect it will have on your company.

If someone you relied on to carry out a vital role was suddenly unable to do so, what would you do? And how would it impact your business if you were unable to replace them? While people will always come first, the cold, hard truth is that a business must be able to continue should you lose a key person, however integral they are to the organisation.

Don’t Be A Statistic

These statistics demonstrate the importance of having Key Person Insurance in place. The unexpected loss of a key person can have a significant impact on a business’s ability to continue operating and generating revenue.

• According to a survey by the National Small Business Association, 50% of small businesses fail within the first five years of operation. Of those that fail, 42% cite the unexpected loss of a key person as the primary reason.
• A survey by Legal & General found that only 12% of small business owners have Key Person Insurance in place to protect their business in the event of the death or incapacitation of a key employee.
• A study by the National Small Business Association found that the average cost of replacing a key person is equal to six times the key person’s salary. This can be a significant financial burden for a small business.
• According to a survey by Swiss Re, one in five small and medium sized enterprises would have to close within six months of losing a key person.

Why we’ve partnered with Broadbench Ltd

Navigating relevant life insurance can be complex. That’s why we recommend Broadbench. Their expert advisers specialise in contractor-specific solutions, offering whole-of-market advice tailored to your unique needs. From risk mitigation to tax efficiency, they simplify the process, ensuring you get the right coverage without the hassle. And the best part? There are no fees for their service—Broadbench is paid by the insurance provider if you choose a product.

Who Is A Key Person?

A key person is an individual whose skill, knowledge, experience or leadership contributes to the continued financial success of the business. In fact, it could be ANYONE whose death could lead to a financial loss for the business through:

• Loss of profits.
• Having to recruit or train a replacement.
• Important personal or business contracts are lost due to the key person not being there to maintain a contract.
• Loss of goodwill which could have a direct effect when it comes to raising capital for the business or attracting new investors.
• Customers and suppliers losing confidence in the business.
• Outstanding loans.

What Can I Use The Payout For?

1. Protecting Your Finances - If losing a key person or you, mean lost profits, Key Person cover will help cover those costs until you’ve recovered. It can be used to pay for wages, replacement staff and even loan repayments owed by the business. This will help keep your business afloat during a difficult period.
2. Paying Off Any Outstanding Debts - With this insurance, any overdrafts and loan repayments are covered. It guarantees the repayment of loans (depending on the cover you choose) in the event of the death of a key person. Having this in place will limit the wider impact on the business to prevent closure.
3. Future-Proofing Your Business - Going through something so difficult as a business as the loss of a key employee could have a huge effect on your staff - particularly the future of the business. With Key Person Insurance taking care of the money side of things, employees can at least be more reassured that the business’s financial future is secure and their jobs aren’t immediately at risk.
4. Covering Recruitment Costs - You might not want to think about replacing someone under such circumstances, especially not immediately after, but the reality is you have to continue doing business. This involves finding someone new to be a part of that. Key Person Insurance will cover the cost of a new employee, as well as the process of advertising and interviewing candidates.
5. Employee Benefit - You can use some of the lump sum received to support your employee during their illness - this makes for an excellent employee benefit.
6. Taking Care Of The Key Person’s Family - It can also provide financial protection for the key person’s family in the event of their death or incapacitation.

Taxation of Key Person Plans

If an employer insures their business against loss of profits due to the death, critical illness, accident or injury of an employee, director or another key person, the premiums may be tax-deductible if:

• The sole purpose of the insurance policy is to meet a loss of trading income from the loss of that key person, and not a capital loss to the business.
• If the insurance is a term insurance policy providing cover against the risk of one or more key lives within the term of the policy, and no other benefits. It’s also important that the insurance term should not exceed the key employee’s usefulness to a company.

All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.

Calculating The Amount Of Cover

When calculating the appropriate amount of cover needed you should consider the effect of the loss of the key person on the business including whether this would directly impact the profits, and what the cost of hiring a replacement might be. There are many calculations such as salary multipliers online, however, the level of coverage required will depend on your unique needs.

We recommend that you speak to your Broadbench expert who will help you to calculate an appropriate amount. Your Broadbench adviser will be able to walk you through the specifics of the policy you choose.

Why Apply for Insurance Through Contractor UK?

At Contractor UK, we understand the unique challenges contractors face, especially when it comes to financial security. That’s why we’ve partnered with Broadbench to offer our members specialised, independent financial advice tailored specifically for contractors.

Here’s why applying through Contractor UK is the smart choice:

• Contractor-Specific Expertise: Broadbench specialises in finding insurance that meets your unique needs as a contractor, ensuring you get essential cover at an affordable price.
• Proven Track Record: Thousands of contractors have trusted Broadbench to protect their families and secure their future.
• Tailored Life Cover: Broadbench advisers offer a range of life insurance policies that can be customised to suit your individual needs.
• Independent Financial Advice: As independent advisers, Broadbench searches the entire market to find the best coverage options for you.
• Trusted Providers: They only work with insurers known for reliable claims payouts and long-term affordability throughout your contracting career.

Partnering with Broadbench means you’ll get expert guidance and insurance that truly protects what matters most. Apply through Contractor UK and ensure your financial security today.

For more detailed information and to book a no-obligation Welcome Call please fill in the form below.