Income Protection for Self-Employed [2026 Guide]

Q: What is income protection for self-employed?

Income protection for self-employed (or self-employed income protection) is a financial protection policy that pays out a regular income if you can’t work due to illness or injury. It pays out a percentage of your income (usually between 50% - 70%) in monthly payments to mimic your income and allow you to keep up with your monthly commitments and living costs. One of the main perks of being self-employed is that you get to be your own boss and you can work on your own terms. However, if you unexpectedly fall ill, you don’t have the security of sick pay from an employer. Income protection can be a vital financial lifeline if you’re unable to earn your usual income, acting as a form of sick pay and allowing you to take time off to recover. There isn’t a specific policy type for self-employed individuals, but there could be range of options available that can meet your needs.

Q: Can you get sick pay if you’re self-employed?

No, if you’re self-employed you’re not eligible to receive Statutory Sick Pay (SSP). Statutory sick pay is the legal minimum that employers must offer their employees. As self-employed workers don’t have an employer, you won’t receive this benefit if you’re unable to work due to sickness. Instead, you’ll need to use your own savings, take out a financial protection policy or claim government benefits. Many self-employed workers choose to take out income protection as a way to provide themselves with their own form of sick pay. Alternatively, you could be eligible to claim Employment and Support Allowance (ESA) from the government.

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Income protection for self-employed

What is income protection for self-employed?
Why do I need income protection if I’m self-employed?
Can you get sick pay if you’re self-employed?
Does being self-employed affect income protection?
How much monthly benefit should you take out with income protection to cover mortgage, bills and living costs?
What is the best income protection for the self-employed?
How much is income protection for self-employed workers?
What are the key policy features to look for when buying income protection as a self-employed worker?
Self-employed income protection FAQs

Self-employed income protection [Quick summary]

Income protection for self-employed can protect you if you fall ill or injured and can’t work. It pays you a regular income while you take time off to recover.
Payments are tax-free and paid monthly, helping you to cover your financial commitments and living costs
You can choose between short term or long term cover. There’s also the option of executive income protection for owners of limited companies
The type of job you do could impact your cover depending on the level of risk involved in your daily activities
Policies come with flexible terms and conditions that can be tailored to meet your unique needs
‘Self-employed income protection’ doesn’t refer to a specific policy type. It simply refers to those who are self-employed taking out an income protection policy

What is income protection for self-employed?

Income protection for self-employed (or self-employed income protection) is a financial protection policy that pays out a regular income if you can’t work due to illness or injury.

It pays out a percentage of your income (usually between 50% - 70%) in monthly payments to mimic your income and allow you to keep up with your monthly commitments and living costs.

One of the main perks of being self-employed is that you get to be your own boss and you can work on your own terms. However, if you unexpectedly fall ill, you don’t have the security of sick pay from an employer.

Income protection can be a vital financial lifeline if you’re unable to earn your usual income, acting as a form of sick pay and allowing you to take time off to recover.

There isn’t a specific policy type for self-employed individuals, but there could be range of options available that can meet your needs.

Through our advised team you can compare income protection quotes from the whole of the market and receive recommendations on what’s best for your circumstances.

Get in touch today for your fee-free quotes.

Find Your Best Quotes » Compare Income Protection

Why do I need income protection if I’m self-employed?

Income protection is an important consideration for those who are self-employed.

Having a policy in place means that during times where you’re unable to work you don’t have to worry about money.

Self-employed workers have been found to take 35% less sick days than those in employment due to the worry about missing out on earnings^[1].

Income protection allows you to take the time off that you need to make a full recovery while being able to cover your monthly outgoings and living costs.

It also means that you don’t have to worry about having a lack of savings to fall back on or dipping into your savings pot that’s meant for something specific (such as buying a home or home renovations).

Can you get sick pay if you’re self-employed?

No, if you’re self-employed you’re not eligible to receive Statutory Sick Pay (SSP).

Statutory sick pay is the legal minimum that employers must offer their employees. As self-employed workers don’t have an employer, you won’t receive this benefit if you’re unable to work due to sickness.

Instead, you’ll need to use your own savings, take out a financial protection policy or claim government benefits.

Many self-employed workers choose to take out income protection as a way to provide themselves with their own form of sick pay.

Alternatively, you could be eligible to claim Employment and Support Allowance (ESA) from the government.

What is ESA?

ESA is paid by the government to help you with living costs if you’re unable to work.

To qualify for ESA you’ll need to be under state pension age and have paid enough national insurance contributions for the last 2 – 3 years.

While your claim is being assessed (this could be up to 13 weeks) you’ll receive an ‘assessment rate’. This will be up to £72.90 per week if you’re aged under 25 or up to £92.05 per week if you’re aged 25 or over.

Once you’ve been assessed you’ll be placed into one of two groups. If you’re able to get back to work in the future, you could receive up to £92.05 per week. If you’re unlikely to be able to return to work or you’re nearing the end of life, you’ll be placed into the support group where you could receive up to £140.55 per week.

Payments will be made every two weeks.

You can find the full details for Employment and Support Allowance on the government website.

Does being self-employed affect income protection?

Yes, being self-employed could impact your income protection application if your job involves a level of risk. For example:

Using dangerous/heavy machinery
Working from height
Frequent travel to ‘unsafe’ areas

During the application, you’ll be asked questions about your job so that insurers can get a better understanding about what you do and whether there’s any risk involved with your daily activities.

If insurers deem you to have a risky occupation, you could pay more for your cover, have exclusions added to your policy or you could be declined.

Being self-employed could also impact what information you need to give insurers about your job.

As your earnings can fluctuate, you could be asked to provide evidence of earnings from the last three years and an average will be taken from this when insurers calculate how much will be paid out.

You may also be asked to provide information in the form of a personal tax calculation or self-assessment tax return from HMRC.

At Reassured, our advised team can help you through every step of the application so you understand what information you need to provide and why insurers need it. We can also answer any other questions you have along the way.

How much monthly benefit should you take out with income protection to cover mortgage, bills and living costs?

You can work out how much cover you’re likely to need by making a list of your monthly financial commitments (such as mortgage/rent payments, bills and debt payments) as well as other living costs (such as petrol, food shops and family spending).

Alternatively, you can use our handy calculator below to get an instant calculation:

How much income protection do self-employed workers need?

Work out how much income protection insurance you may need based on your current financial commitments. Simply fill in the fields which apply to you for an instant calculation.

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What is the best income protection for the self-employed?

As someone who’s self-employed you could take out a personal income protection policy or an executive income protection policy. The option that’s best for you will depend on your needs, the type of business you own and your budget.

Personal policies are available to most UK workers (you simply need to be working a certain amount of hours), whereas to take out executive income protection you must be a self-employed director of your own limited company.

Personal income protection

Personal income protection is available to self-employed individuals.

It covers you if you’re too ill or injured to work and provides monthly payments.

Payments help you to keep up with your living costs and financial commitments until you’re well enough to return to work.

Up to 70% of your earnings could be paid out
Pays out if you can’t work due to illness or injury (unemployment isn’t covered)
Monthly payments are tax-free
Can be taken out with a short term or long term payment period
Available through the advised team at Reassured

Executive income protection

Executive income protection is available to self-employed directors of limited companies.

It’s an option that means you could protect your own income or the income of one of your employees.

The policy will be taken out and paid for by the business.

Up to 80% of the insured employees’ earnings could be protected
Pays out if the insured employee can’t work due to illness or injury (unemployment isn’t covered)
Premiums could be classed as a business expense
Available through the advised team at Reassured

At Reassured, our advised team can help you compare quotes for both personal and executive income protection.

We can save you time and money by providing you with multiple quotes at once and giving expert advice on what options are best suited to your needs.

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How much is income protection for self-employed workers?

The cost of income protection for the self-employed will depend on your personal circumstances and policy details, including:

Personal details:

Age
Occupation
Smoking status
Health
Lifestyle

Policy details:

Benefit amount
Policy term
Payment period
Deferred period
Definition of incapacity
Premium type

Depending on your job you could also be asked further questions to find out about the risk involved with your daily tasks.

If your occupation is seen to be high-risk, you could be charged more for a policy. For example, a construction worker who works on site will likely pay more than a freelance writer who works from an office space or from home.

Below are some example quotes for a non-smoker, in good health, with a low-risk occupation and an annual income of £30,000. The policy term is until age 65, with a 3 month deferred period.

Age	Short term payment period	Long term payment period
20	£5.00	£11.26
25	£5.45	£12.69
30	£6.25	£15.07
35	£7.50	£17.31
40	£7.50	£21.07
45	£8.41	£23.66
50	£10.30	£29.55

Although the above quotes can help to give you an idea of pricing, the exact cost you pay could vary based on the factors mentioned above.

Our advised team can save you time and money by comparing multiple quotes at once and finding you the best prices for your circumstances.

What are the key policy features to look for when buying income protection as a self-employed worker?

Income protection policies come with a range of features that can be tailored to meet the needs of self-employed workers.

Below are the standard policy features, how they work and some considerations for those who are self-employed:

Feature	Description
Policy term	This is how long your policy will last for. As someone who’s self-employed, you might want your policy to end around the time you’ll think you’ll retire. Although, with most policies, your cover will need to end by age 70.
Payment period	How long you’ll receive your payments for. This will either be on a short term basis (either up to 1 or 2 years) or a long term basis (also known as ‘full term’ as payments could last until the end of your policy). A short term payment period is beneficial for making multiple claims throughout the policy term, whereas a long term payment period is beneficial in paying out for the remainder of the policy term if you’re unable to return to work.
Definition of incapacity	This outlines under what circumstances your policy will pay out. Most policies come with an ‘own occupation’ definition which means the policy will pay out if you can’t carry out your own job.
Benefit amount	How much will be paid out to you. This will be a percentage of your earnings (usually between 50% - 70% depending on the insurer). It will be paid to you in monthly payments.
Deferred period	You’ll need to wait for a deferred or waiting period to pass before your payments will start following a claim. You’ll choose this time during the application process, typical options include 4, 8, 13, 26 or 52 weeks. For example, if you have a 4 week deferred period your policy would pay out 4 weeks after your claim was made if you’re still unable to work. If you don’t have savings to fall back on during times of ill health, having a shorter deferred period means there’s less time to wait before getting your payments.
Premium type	How you’ll pay for your cover. Premiums can be guaranteed (stay the same), reviewable (could change due to certain factors, such as change in risk) or age-banded (increase each year as you get older).

Income protection policies also come with a range of additional features which could be beneficial for self-employed workers, such as:

Additional feature	Description
Health and wellbeing support	Many policies come with health and wellbeing services that give you access to mental health support, virtual GP appointments, rehabilitation to help you get back to work, plus more.
Fracture cover	A payment will be made if you sustain a specific bone fracture. The amount paid out will depend on the type of fracture. This payment is made separate to your monthly payments.
Hospitalisation benefit	If you’re hospitalised a payment will be made for each day you’re in hospital, up to a certain amount of days.
Waiver of premiums	You won’t have to pay your premiums during a claims period.

Some of these benefits may come as standard with some insurers, while others may let you add them to your policy for an additional cost.

Comparing quotes is essential in finding the most comprehensive policy to meet your needs. Get in touch for your fee-free quotes.

How can I compare income protection insurance quotes to find the most affordable and comprehensive option?

You could compare quotes by going to each insurer and applying individually or you could use the help of a comparison service.

At Reassured, our advised team can help you compare income protection quotes from the whole of the market.

This saves you valuable time and money as you can find out about all of your options at once to make sure you’re getting the right cover for your needs.

You’ll also benefit from:

Tailored advice and recommendations for your unique needs
Fee free quote comparison service, allowing you to compare a range of policy types
Specialist insurers for applicants with more comprehensive needs

Best of all, you’ll give yourself peace of mind that your income is protected and your financial commitments will be taken care of should the unexpected happen.

Get in touch to explore your options.

Compare Self-Employed Income Protection Quotes »

Self-employed income protection FAQs

Is income protection tax deductible for self-employed?

If you’re taking out an executive income protection policy, it could be tax deductible.

As this type of policy is taken out and paid for by your business, the premiums can be seen as a business expense.

If you don’t qualify for executive income protection and you’re taking out a personal policy, this option won’t be tax deductible.

How do I choose between income protection and critical illness cover as a self-employed person looking for sick pay security?

When deciding between income protection and critical illness cover, it’s important to consider how you’d like to receive your pay out and how you want your policy to work to best meet your needs.

While both income protection and critical illness cover can both help you to protect your income, they work in different ways.

Income protection pays out monthly to mimic your income and there’s no set list of conditions written into your policy so you could be covered for a wide range of illnesses and injuries.

Critical illness cover pays out in a lump sum in the event of a specific illness and most commonly needs to be added to a life insurance policy.

If you just want protection for your income to help keep up with monthly budgeting if you fall ill/ injured and can’t work, income protection can help with this.

If you’re looking for a lump sum payment that could help to cover larger costs, critical illness cover can help with this.

If it’s within your budget, you could take out both forms of cover at the same time.

Are there self-employed income protection plans that cover mental health and stress as well as physical illness?

Yes, as well as covering physical health conditions, income protection policies also allow you to claim for mental health reasons.

In fact, mental health is often one of the most common reasons for a policy paying out.

For example, in 2024, 7.9% of Legal & General’s income protection claims were due to anxiety and depression^[2].

However, if your mental health condition is pre-existing it’s likely to be excluded from your policy. This means you won’t be able to claim for this reason.

What is not covered by self-employed income protection?

The following isn’t covered by income protection:

Unemployment
Self-inflicted injuries
Injury/illness as a result of drug or alcohol misuse
Pre-existing conditions

If you have a dangerous job or hobby it could also be written into your policy that it won’t pay out for injuries that occur as a result of your job or hobby.

Can I claim income protection alongside government benefits?

It could be possible to claim income protection and government benefits, such as ESA, at the same time. However, it’s likely that the amount that’s paid out will be impacted.

Ultimately it will depend on the policy terms and conditions as well as the type of benefit you’re looking to claim.

If you’re unsure about how a financial protection policy would work alongside government benefits, you may wish to consult a financial advisor who can advise on what’s best for your situation.