The 5-Minute Policy Health Check
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The 5-Minute Policy Health Check:
Is Your Current Cover Actually Going to Pay Out?
Many contractors and business owners take out a life insurance or income protection policy, file the paperwork away, and never look at it again. However, as your career evolves, moving from permanent employment to contracting, changing your IR35 status, or growing a limited company, your old policies may no longer provide the protection you think they do.
If your circumstances have changed, your cover might be inadequate, or you could be missing out on significant tax savings. Take this 5-minute health check to see if your policies need an urgent review.
If you took out a personal Income Protection policy while working outside IR35 (drawing a low salary and high dividends), but have since moved to an inside IR35 contract (paid via an umbrella company), your income structure has fundamentally changed. If you try to claim, the insurer will assess your current income. If your policy is not structured to reflect your new IR35 status, you could be significantly underinsured, or the payout could be heavily taxed.
Are you paying for your life insurance via a direct debit from your personal bank account? If you are a limited company director, you are paying for that policy out of post-tax income. By switching to a Relevant Life Insurance policy, your business can pay the premiums as an allowable business expense, potentially saving you up to 50% through Corporation Tax, Income Tax, and National Insurance relief.
Has your business grown significantly since you first took out Key Person Insurance? Have you taken on large business loans or hired new staff? If your key person cover was designed to protect a £100,000 turnover business, and you are now turning over £500,000, your policy will not provide enough liquidity to save the company if you or your business partner suffer a critical illness.
Do you have a Cross-Option Agreement in place alongside your Shareholder Protection? Without the correct Shareholder Protection agreements, the surviving shareholders may have the cash from the insurance payout, but no legal right to force the deceased shareholder’s family to sell the shares. This is a critical and commonly overlooked gap.
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Don’t Leave It to Chance
If this health check has raised any doubts, do not wait until you need to make a claim to find out your policy is outdated. Broadbench offers a comprehensive, no-obligation review of your existing protection portfolio.
FAQs
Does it cost anything to review my existing policies?
No. We offer a complimentary, no-obligation review of your existing protection portfolio to ensure it still meets your needs and is structured tax-efficiently.
Refer to our Contractor Financial Glossary.
What if I have developed a health condition since taking out my original policy?
Do not cancel your existing policy. We will review your current cover and research the market. If new cover would be significantly more expensive or exclude your condition, we will advise you to keep your existing policy.
Can I change a personal life insurance policy to a Relevant Life policy?
You cannot simply “transfer” the tax status of an existing personal policy. However, we can help you set up a new Relevant Life policy through your company and then cancel the personal one, ensuring you have continuous cover throughout.
Do I need to prepare any documents for the Welcome Call?
No. The Welcome Call is simply an introductory chat to understand your high-level goals. We will request specific documents later in the process.
Are your recommendations tied to specific providers?
No. We are independent brokers, meaning we search the whole market to find the best mortgage and protection products for your specific circumstances.
What happens if I decide not to proceed after the Discovery Call?
You are under no obligation to proceed. If you decide our recommendations aren’t right for you at this time, you simply walk away with a better understanding of your options at no cost.
Ready to ensure your cover is fit for purpose?
If this health check has raised any doubts, do not wait until you need to make a claim. Fill out the form below to arrange a complimentary policy review with a Broadbench protection expert. We'll ensure your cover works as hard as you do.