Self Employed
Income Protection Insurance
Should you get self-employed income protection
and which cover is best?
Self-income protection is an important thing to have as a working adult. It will provide you with a long term form of income should you be rendered unable to work due to accident or injury.Â
You’ll be able to receive between 50 and 70% of your monthly income through this scheme and it will provide you with peace of mind and a safety net of sorts if you are unable to perform your duties as a self-employed worker. Insurance companies vary with that level of income protection they provide, and it is worth researching the options.Â
Why do self employed people protect their income?
Many people across the UK become injured or ill every single year, and over a million (ABI 2017) have no way to earn income through work. It’s incredibly important to have income protection insurance for times like these because it gives the policyholder a safety net and allows them to stay financially stable and support their family. If tomorrow you were unable to work, would you be able to support your family? It is crucial that we all have income protection insurance in case we ever need to pay bills without a job.
What is income protection insurance?
Income protection insurance or permanent health insurance is a policy that runs long-term and aims to assist you with your finances if you are unable to work due to illness or injury. It ensures you will receive regular salary payments until you can return to work or you retire.
- It replaces a portion of income - usually 50-70%
- It provides regular payments until you start working again, retire, or die. You can also decide to end the policy if you no longer need it
- There is a waiting period before payments - when you set up a policy there is a waiting period set for after sick pay ends or until after any payment from another policy ends
- It covers most illnesses that would cause you to be out of work for a significant stretch of time
- You can claim more than once - During the policy you will be able to claim for income support as many times as you need to. Income protection insurance is different to other types that will pay you a lump sum of money, and it is important to do your research and choose a reliable broker to help you find the best policy. It is not the same as short-term income protection insurance that limits you on the time period of the cover. Short-term income protection insurance also often covers less illnesses so a longer term policy may be better for you.
Do you need income protection insurance?
If you want to ensure that you are financially covered no matter your health, you need to take out an income protection insurance policy like the ones we offer. Many people are taken ill each year and unable to work, and what would happen if you were suddenly put into this position?
Being able to pay your bills and support your family without worry is valuable, and that’s what this type of insurance is able to do for you.Â
Who doesn’t need income protection insurance?
There are some situations where you may not need income protection. These reasons may include:
- Your sick pay is generous - some companies pay hefty sick pay to their employees, so you may be able to get on just fine with this, even over a long period of time
- You can use government benefits - If for example the other earner in your home can manage most of the bills, you may nott be able to survive with only government benefits
- You’ve saved up - If you have been smarty and saved up a lot of money throughout the years, you could have a sizeable savings fund to dip into during the time you are out of work
- You can retire - if you are reaching retirement age, you might consider taking an early retirement instead of worrying about money
- You have family to support you - If you have a partner or family who earn enough money to support you, you don’t need to take out income protection insurance
How much does income protection insurance cost?
- Age Job
- Illness or injury
- Percentage of income you desire
- Waiting period
- If you are a smoker
- Family medical history
Why choose income protection?
Income protection insurance can be a commodity you never have to use, however if you do find yourself in a troubling situation it is an important policy to have access to. There are a lot of helpful features for you to consider investing in for yourself:
- Monthly payment - you will; be able to receive monthly payments to support you in terms of bills and allow you to continue living the same lifestyle.
- Flexible cover - you’ll be able to decide when payments start and how long your cover will last.
- Fixed or variable - there are both fixed and variable options to think about, meaning the interest will either stay the same to increase and decrease with inflation.
Self Employed Income Protection FAQ's
Income protection insurance is focused on time off work for an injury or illness and therefore will not cover disability.Â
If you are looking for financial security in every aspect of your life it is well worth getting this insurance.Â
You can choose to pay income protection as an individual or through your company.
When you are self-employed it is important for you to take out self-employed income protection as well as liability insurance.Â
Ask YesCanDo for income protection insurance advice
At YesCanDo we take time to understand your individual needs. We will search the income protection insurance market to get you the best cover and the right cover for you. Because we search the whole market, we also make sure we get you the most affordable cover.
Request a FREE quote from a income protection insurance broker
Please complete the contact form and one of our income protection insurance advisors will WhatsApp you a quote or call you back to offer no-obligation advice.
Have you throught about other protection insurance
such as Life Insurance?
Life insurance
Life insurance pays out in the event of you dying. Apologies if this is a little hard hitting however this is exactly why you need life insurance. Your family will have enough to cope with in the event of your death. Don’t give them financial problems to compound this. Life insurance is very affordable.
Mortgage protection
The purpose of mortgage protection is to pay your mortgage off should something happen to you. You will be able to choose just life cover or life with critical illness cover. This would mean that in the event of something happening to you your mortgage debt is repaid. This means you will always have a roof over your head and one less bill to pay each month.
Term insurance
Term insurance is usually used to protect you and your family in the event of your death or a critical illness. Many people have this in addition to mortgage protection especially when they have a young family. The reason it is called term insurance is that a specific term will be chosen that you need cover for. The most common term chosen is one to tie in with your dependents becoming 18 or 20 years old.
Critical illness insurance
- Cancer
- Heart Attack
- Stroke
- Multiple Sclerosis
- Parkinson’s
- Alzheimer’s
Most insurance companies will cover you for over 50 critical illness conditions, so you are covered whatever life throws at you.
Whereas life insurance pays out in the event of your death to your family, critical illness cover is different as it pays out to YOU! This means that you will be able to pay your mortgage off so that you and your family will always have a roof over your head.
In the event of a critical illness employers will often pay your salary for a few months and then this will stop suddenly, putting you in financial difficulties. This is where critical illness cover will save the day. You will be paid a lump sum which you can decide what you do with. You may use it to replace your salary for a while and then when you get better you may decide to go back to work or start a less stressful job and use the money to subsidise your income.
Terminal illness benefit
Life insurance FAQ's
The reason why most people need life Insurance is to protect their family if the event of them dying or being diagnosed with a critical illness. Life Insurance or Critical Illness cover is there to usually pay a lump sum to you or your family to stop any financial hardship. Your family will be suffering from the loss of a loved one and the last thing they will need is the stress of not being able to pay the bills at a very emotional time.
Basically the more dependents you have, the more life assurance you will need. Similarly the larger your mortgage loan, the more life insurance you will need.
You will need Life Insurance for as long as you have family that are dependent on you. Most people choose to have Life Insurance or Critical illness cover until their children are age 18 or 21 if they are at university. If no children are involved then some choose to cover themselves until retirement age.
The term for Mortgage Life Insurance, also known as mortgage protection or decreasing term insurance, usually coincides with the amount of years left on your mortgage.
The younger you are, the less Life Insurance and Critical Illness cover costs. Premiums will also be lower if your are a non smoker and if you are in reasonable health.
Example of cost – £100,000 cover for a 30 year old non-smoker over 25 year term = £5.73 per month
There are many Insurance companies in the UK all offering different types of life cover. The best way to make sure you are not only getting the right cover, but also the lowest price, is to use an insurance broker.
An Insurance broker will shop the insurance market and work independently so won’t be tied or swayed towards certain insurers.
At YesCanDo we are a whole of market Insurance broker. This means that we will search the market to get you the best price for the best cover. We have a team of in-house insurance specialists that will be on hand to advise you and get you various cover options to consider. Once agreed and you are happy. one of our amazing team will see your application through to completion, keeping you updated each step of the way. We are a NO FEE Insurance broker therefore we do not charge you for our services.
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