Term life insurance for self-employed professionals

What is term life insurance?

With a term life insurance policy (overlijdensrisicoverzekering, OVR), your partner and children will receive a predetermined amount in the event of your death. You agree on the amount of this sum when you take out the insurance. The amount you agree on affects the premium you pay each month. Your age and state of health may also affect your premium.

Family members do not automatically receive a survivor’s pension

If someone in paid employment dies, their partner and children receive a survivor's pension. This is not the case for independent entrepreneurs. If you die, your family is not automatically entitled to this pension. Do you want to make sure that your family will not get into financial trouble when you die? Then it is sensible to take out a term life insurance policy.

Life insurance for a business partner

Do you run a business with a business partner, for example a general partnership (VOF) or a limited partnership (CV)? You can also take out life insurance for your business partner. This is known as business partner insurance (compagnonsverzekering). In the event of your death, your business partner will then receive a payout. They can use this, for example, to buy out your share in the business, ensuring that the business can continue to operate.

How does a term life insurance policy work?

You can insure yourself in various ways.

Fixed sum life insurance: always the same amount

With a fixed sum life insurance policy, you are insured for a fixed amount at a fixed premium for the entire term. The amount paid out to your beneficiaries remains thre same regardless of when you die.

Linear decreasing sum life insurance: the amount decreases steadily

With a linear decreasing sum life insurance, the amount that your surviving dependents will receive decreases each year by a fixed amount. The premium you pay also decreases. This form is especially interesting for older self-employed professionals: the older you get, the less your dependents’ need for benefits.

Annuity decreasing sum life insurance: the amount decreases

The amount that your dependents will receive also decreases with an annuity-based decreasing sum life insurance policy. The amount decreases less rapidly at the beginning of the term than at the end. You also pay less premium during the term.

The annuity decreasing sum life insurance is often taken out in combination with an annuity mortgage. The amount paid out then decreases at the same rate as the mortgage debt, ensuring that the benefit is always high enough to cover the outstanding mortgage debt.

Duration of term life insurance

You can choose between a temporary or a lifelong insurance.

Temporary insurance

This will be paid out if you die within the agreed term: this is the period during which you are insured. For example, a term life insurance that is linked to a mortgage. A mortgage always has a certain term. You link a life insurance policy to a mortgage if the death benefit is meant to pay off the mortgage debt, or part of it.

Lifetime insurance

There is no end date for this type of insurance. The insurance will always pay out in the event of your death.

What does term life insurance cost?

The premium you have to pay depends ondifferent things. The most important are:

• The amount you want your dependents to receive when you die.
• Your age and health at the time you take out the insurance.

Your situation can change so much during the term of the insurance that you have to adjust the coverage upwards or downwards. For example, you might be renovating or moving to a bigger house, which will increase your mortgage. Or you might have children.

Check what other insurances you need

Have you also thought about other risks? For instance, what happens if you fall ill and are no longer able to work? Disability insurance insures you against loss of income due to illness.

See all business insurances.