Self-employed? Get protection

If you’re self-employed, it’s essential to ensure you have the right protection in place – otherwise, you risk leaving yourself financially vulnerable if you’re unable to work.

Many people enjoy the freedom that comes with being self-employed – you can be your own boss and work on your own terms. However, it does mean that you’re not eligible to receive Statutory Sick Pay if you’re unwell.

No sick pay, no safety net

Research has found that self-employed people take 35% fewer sick days than employed workers because they’re worried about losing out on income. However, carrying on working could be more detrimental to your health in the long run. It’s therefore vital to have appropriate income protection in place, so you can take the time you need to return to full health.

The importance of income protection

Income protection insurance provides a portion of your income (typically 50-70%) if you are unable to work due to illness or injury. It pays out regular monthly payments until you return to work, retire, or reach the end of your policy term.

Unlike critical illness cover, income protection covers a wide range of medical conditions, from mental health issues to physical health conditions. If you have a pre-existing condition, this may not be covered by the insurer, so it’s important to understand your policy terms.

The waiting period

Once you have stopped work, you will typically have to wait a specific length of time before you can claim income protection payments – this is called the deferred period. As you don’t qualify for Statutory Sick Pay, you may opt for a shorter deferred period so that you can receive financial support sooner. This does mean that your premiums will be higher, so it’s important to calculate how long you could manage without an income.  

How your work affects your insurance

If your job involves a level of risk, this may impact your cover. For example, you might be a contractor who frequently uses heavy machinery and works at height. When applying for income protection, your insurer will ask a range of questions about your job so they can ascertain how much cover you need. It’s important to answer these truthfully, or you risk invalidating your policy.

Executive income protection

If you are a self-employed director of your own limited company, you might consider executive income protection insurance. The policy will be taken out by the business and protects you or an employee in the event of illness or injury. Get in touch with us if you are considering this option.

Here to help

We can help you source an income protection policy that is tailored to your unique circumstances.

As with all insurance policies, conditions and exclusions will apply

Source:

https://www.reassured.co.uk/income-protection/income-protection-for-self-employed/#:~:text=Self%2Demployed%20income%20protection%20%5BQuick,to%20meet%20your%20unique%20needs