Remote Worker Life Insurance In The UK

For remote workers, it offers more control over life and often an easier time with a work-life balance. For companies, it often opens doors to outsource tasks to workers without the need to pay them benefits, a competitive salary, or even a pension. This is the line between self-employed gig workers and salaried remote workers.

As a remote worker in the UK, you have many concerns, including planning for the future. Are you assured of your salary, benefits, and pension?

The exact circumstances may vary, and planning for the future in an unstable economic climate can be distracting and distressing.

Remote worker life insurance is a huge part of planning for the future, especially for the future of your spouse and your family after you pass. Once life’s immediate concerns and expenses have been satisfied, it makes sense that you would turn to that hopefully far-off future.

As a remote worker, what are your options for life insurance coverage in the UK? There are a few different situations to consider.

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Remote Workers Living In The UK At UK Companies

The first option is when you’re a resident of the UK working for a UK company. You’re classified as remote simply because that’s how you work, somewhere, not in an office. Maybe you work from home.

You might be able to work from anywhere you like and take advantage of that to work from different locations throughout Europe or even on vacations away from the continent. You might also work from home and enjoy the flexible hours and ability to spend time with your family.

Whatever the case may be, as long as you’re an actual employee of the company and you’re a resident of the UK, the company will be required to provide a slate of benefits ranging from a competitive salary to sick pay and parental leave.

So, is life insurance covered as part of this standard benefits package? Yes and no.

Life insurance is not a mandatory part of the benefits and compensation packages offered to remote workers in the UK or of UK companies. However, it’s a relatively common addition to the benefits package to help make working for the company slightly more attractive.

Other benefits tend to be more compelling, so life insurance is usually more of an afterthought.

Additionally, the life insurance provided by a company you work for may or may not be the ideal choice.

It may not be held through a provider you like or trust, or it might have restrictions or limitations on the amount of cover you can get, or it might simply remove too much control from your hands. You can certainly still take advantage of it, though.

Many UK residents, whether remote workers or otherwise, are under-covered or not covered by any life insurance policy.

It’s almost always a good idea to look into such a policy to see what you can get, how much it will cost, and how much it might change the lives of your dependents.

Fortunately, there’s no penalty for having multiple life insurance plans. If you feel under-covered by your company’s offerings or your company doesn’t offer anything for you, you can sign up for your own. For more information, see the later sections of this guide.

UK Residents Working for Overseas Companies

Another option is that you’re a resident of the UK, living and working in the UK, but the company you’re working for is not based in the UK. Maybe they’re based elsewhere in Europe or in the United States or Canada.

Wherever they’re located, as long as you’re in the UK, you don’t have to worry too much.

This is because, as part of UK law, if any company wants to hire UK workers to work remote, they have to offer at least a certain minimum set of compensation and benefits, called the statutory benefits.

These are meant to be roughly comparable to the benefits and compensation afforded to UK residents working for UK companies. This is to prevent foreign companies from hiring UK workers and treating them worse than other citizens.

Statutory benefits include things such as:

• Guaranteed minimum wages and overtime pay.
• Paid time off and sick pay.
• Maternal, Paternal, and Parental leave.
• Bereavement pay and leave.
• Access to a pension scheme.

One thing not on this list, however, is life insurance. When a company in the UK offers life insurance as part of its benefits package, this is usually known as life assurance.

Functionally, it’s the same as life insurance, just managed by the company with your input rather than wholly managed by you.

It’s worth mentioning that occasionally, foreign companies will try to skirt these laws, either by classifying you as an independent contractor rather than an employee or simply by assuming that you don’t know your rights.

Make sure you know what kind of contract you’re working under and what kinds of laws apply; you may be able to pursue the company with the backing of the United Kingdom Government using the complaints system.

HM Revenue and Customs, the Employment Standards Inspectorate, and other agencies are all keen to take this quite seriously.

And, of course, since life insurance (or assurance) isn’t guaranteed as part of the law, it’s frequently possible that you don’t have any coverage from your employer.

If you need life insurance coverage or want to explore your options and see what’s available on the market, skip to the later sections of this post for more information.

Overseas Residents Working For UK Companies

The third possible situation (out of four, though the fourth concerns overseas workers working for overseas companies and doesn’t apply to this discussion) is where you’re a foreign resident working for a UK company.

Overseas employees are in a variable state depending on where they live. Different countries have different labour laws. In much the same way that a company hiring people in the UK has to play ball by the UK rules, a UK company hiring overseas has to play by the rules of the country where they’re hiring.

Fortunately for those companies – and to the dismay of more than a handful of remote workers – many other countries have worse or laxer labour laws than the UK. Many UK companies offer employees a similar pay and benefits package regardless of location, with some potential variations.

The exception, of course, is when they classify remote workers as contractors.

It’s the same story no matter where a company originates or where the remote worker lives; when you work as an independent contractor, you have more flexibility and freedom, but you also take many matters into your own hands, including everything from pensions to life insurance cover.

If you’re in the market for life insurance coverage, most of the information below can be helpful to you, but we may not be. We help UK residents get UK life insurance coverage; if you’re outside of the country, you’ll likely have a different set of insurance providers and options available to you.

However, we offer life insurance plans for expats, which is certainly something to consider.

Many of the same terms and the same information will be relevant – like the options of term and whole life insurance cover – but the specific providers will be different. Still, if you can get anything valuable from the remainder of this post, feel free to do so.

What To Consider When Shopping For Life Insurance In The UK

There are many factors to consider when shopping for life insurance in the UK and elsewhere. Discussing variations and details will, by necessity, be generalised; the specifics of policies, cover, and terms will come down to the company you choose to work with, the quote they give you, your health, and your specific needs. In broad terms, then consider the following.

Single vs Joint Insurance Cover

One of the first decisions you may need to make is whether to purchase a single policy or a joint policy. A single policy covers you and you alone. When you pass, it pays out to whoever you assign as your beneficiary.

In contrast, a joint policy covers two people, generally yourself and your spouse. When one of you passes, the policy triggers and the benefit is paid out to the surviving partner, and that’s that; the policy generally doesn’t continue, and you may or may not be able to assign someone other than your partner as the beneficiary.

Deciding whether to have a joint policy, a single policy, or two policies (one for each partner) can depend on your individual life circumstances, but it’s worth considering.

Term vs Whole Life Insurance

One of the biggest choices to make is what kind of policy you want.

In general, term life insurance policies run for a fixed amount of time, which could be 10, 20, or as much as 40 years. During that time, the cover amount is fixed, as are the premiums. If you pass during the covered term, the benefits payout.

If you don’t, though, and the term runs out, you have nothing to show for it. Sometimes, you can roll over into a new policy with a recalculated premium based on your new life circumstances, which may not be financially viable.

There are also various kinds of term life cover. These include decreasing term life insurance policies, which are tied to a mortgage loan balance and will pay off the mortgage if you pass.

Since you pay down your mortgage over time, the amount the policy covers goes down, hence the name. Conversely, increasing term policies increase the amount they pay out year over year, mostly to account for inflation.

Whole life cover, in contrast, doesn’t have an expiration date. However, they generally have somewhat higher than normal premiums for lower-than-average cover amounts. If you live longer than anyone expects, you may have paid more into the policy than you get out.

How Much Cover You Need

Another consideration is how much coverage you want to maintain. You can pick an amount that seems good and go with it – like getting a £100,000 policy to cover your mortgage (or some of it) with whatever is left over to go to your dependents.

Alternatively, you might use a formula to estimate the amount of cover. The Human Life Value estimation method calculates the amount of money you’re likely to earn throughout the remainder of your life and aims for a policy around that value.

You might choose a more straightforward estimation, like picking an amount for college tuition for each child you have or plan to have.

Another common framework is the DIME method, which considers your debt, income, mortgage, and education costs to figure out how much money is needed to cover lost income and debt obligations.

Whatever your choice, it’s always a general fact that the more cover you want, the more you’ll spend to get it.

Timing for Applying

Sometimes, you may consider applying for cover ASAP or even delaying for a year or more, depending on the circumstances. For example, if you’re pregnant, your body changes, and you can develop health problems.

Applying before you develop those problems is better than after; since you don’t have them, you don’t have your premiums increased for it. If you do develop them, waiting until you work past them can be more beneficial.

That said, the older you get, the more chance there is for health problems to develop or disaster to strike, and it’s often better to be covered than not.

How to Get the Best UK Life Insurance

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