Would you like your family to maintain their lifestyle should the worst happen to you

When it comes to life insurance many people calculate what they’ll need to provide to keep a roof over their family’s heads and pay the mortgage. That’s not bad thinking but it’s also not great thinking. That’s because, it is unfortunately not taking into account all of the other essentials that have become part of the fabric of modern life.

If you have a family with one or more children have you considered the cost of bringing those children up? Recent research shows that the average cost of bringing up a child to the age of 21 in the UK is around £230,000 or £910 a month. So if you have more than one child that cost is going to be quite significant.

If you have opted to school your children privately then the cost is going to be much higher again. So it’s important to ask yourself whether you want your partner to bare that responsibility if you weren’t around to contribute.

Add on top of that the lifestyle that your family has grown accustomed to with the earnings that you bring home as a contractor. You probably have a comfortable home, nice cars and hopefully some well-deserved holidays.

This means that when it comes to arranging life insurance, if you want to provide for your family it is best to take all of these non-essentials into account. If you want to make sure that your family could continue to lead the lifestyle that you have worked hard to provide for them – you’ll need to add up to what this lifestyle costs each year. You can then work out how long it would be sensible to contribute to these outgoings for. When you have done this you’ll have a much better idea of the level of cover that would be ideal in case the worst happens.

The good news is that when you are working as a contractor and running your own company, you can put your life insurance through your business expenses. Structuring your life insurance through your business means that can make significant savings overall. Making savings in this way gives you more choice. You could choose to pocket the savings now, or you could use them to make sure that you have the cover in place to afford your family a comfortable lifestyle should the policy need to pay out.

When thinking about life insurance you are typically looking to make sure that your family are well provided for and in the process giving yourself peace of mind that you have it covered off. It makes sense to make the most of the tax savings available to you when running your own company and pay for your life insurance on company expenses. The saving you make can then be used, if you choose to, to get the right level of cover in place to cover more than just the roof over your family’s head.

Calculate the tax savings you could be making by paying for your life insurance on company expenses.