If you are self-employed, it is worth considering the right protection to help manage your finances if you are unable to work.
Many people enjoy the freedom of being self-employed; however, it does mean that you are not eligible for Statutory Sick Pay if you are unwell.
Managing your income Research suggests that self-employed people may take fewer sick days than employed workers due to concerns about lost income. However, working while unwell could be detrimental to your health. It is worth exploring income protection, which may help provide support while you focus on your health.
The importance of income protection Income protection insurance typically provides a portion of your income 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 may cover a wide range of medical conditions. If you have a pre-existing condition, this may not be covered by the insurer, so it is important to understand your specific policy terms.
The waiting period Once you stop working, there is typically a “deferred period” before you can claim payments. As you do not qualify for Statutory Sick Pay, you may opt for a shorter deferred period to receive support sooner, though this may result in higher premiums.
How your work affects your insurance If your job involves specific risks, this may impact your cover. When applying for income protection, your insurer will ask questions about your work to determine the appropriate cover. It is important to answer these truthfully to ensure the policy remains valid.
Executive income protection If you are a self-employed director of a limited company, you might consider executive income protection insurance, which is taken out by the business. Get in touch with us if you are considering this option.
Here to help We can help you source an income protection policy tailored to your circumstances. Please note that we may receive a commission from the insurer. As with all insurance policies, terms, 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
