What is loss of earnings insurance? Find out the key facts…
Yes, you can get income protection insurance if you’re self-employed.
In fact, income protection can be particularly beneficial for those who are self-employed who don’t receive traditional sick pay benefits from an employer.
During periods of ill health or injury, many self-employed workers could miss out on vital income, need to rely on government benefits to get by financially or face going back to work before a full recovery has been made.
If you were unable to work for an extended period, could you afford to keep up with your bills and living expenses?
Why not protect your self-employed earnings with income protection?
Reassured Advice can help you find the right policy to meet your needs at the best available price.
Their FCA-regulated service can provide you with free income protection quotes from the whole of the market.
Simply get in touch to compare quotes from all the UK’s best providers.
This helpful self-employed income protection guide will be covering:
Income protection is a policy which can protect your income, regardless of whether you’re self-employed or in employment.
An income protection policy can pay out a percentage of your income if you’re unable to work due to illness or injury.
You’ll be provided with a monthly, tax-free, income until you’re able to return to work (or potentially until you retire).
Whether you need income protection as a self-employed worker will ultimately depend on your needs and personal circumstances.
Research from leading provider LV= shows that only 6% of self-employed workers have an income protection product in place, compared to 16% of those in employment.
This is despite those in employment already receiving sick pay benefits from an employer or statutory sick pay (SSP) to provide them with an income while they’re unable to work.
Without the right protection in place, those who are self-employed may need to rely on government benefits such as employment and support allowance (ESA) which could pay up to £77.00 per week (or £117.60 if your incapacity means you may struggle to return to work in the future).
Would this be enough to pay your bills, mortgage/rent and essential living costs?
The research also showed that:
This suggests that income protection could be beneficial if you’re worried about what would happen to your earnings, or would struggle to make ends meet, if you were unable to work.
Why not compare income protection quotes for the self-employed through Reassured Advice?
A friendly member of the team can help you to find the best policy for your personal circumstances.
Income protection for self-employed works just the same as any income protection policy.
A friendly member of the Reassured Advice team will be happy to answer any questions you may have and guide you through the whole application process.
Simply get in touch.
The best income protection insurance policy for self-employed will depend on your individual circumstances and your budget.
When establishing the best policy for you, you may wish to consider:
As someone who’s self-employed, there are multiple options for you to cover your income, including:
Keep reading to find out more about the policy options available to those who are self-employed…
A personal income protection policy can be secured by any self-employed individual as a way to protect your own income.
The monthly payments you receive can help you keep up with day-to-day financial commitments until you’re well enough to return to work.
Cover can be taken out on a long-term basis, which could provide you with payments until you reach retirement (if your incapacity means you’re unable to return to work).
Alternatively, for those on a tight budget, a short-term policy can be taken out, which could provide payments for up to 1, 2 or 5 years.
Due to the shorter payment period, it could be possible to make multiple claims throughout the policy lifetime.
Why not compare personal income protection polices from the whole of the market through Reassured Advice?
Executive income protection can be taken out by small - medium sized businesses as a way to protect the income of an employee.
Any employee could benefit from the payments from an executive income protection policy, including self-employed directors.
As an executive income protection policy is set up and paid for by a business, the premiums could be classed as a business expense (making them tax-deductible).
However, as the payments are passed on using PAYE, the person receiving them will be required to pay for national insurance and income tax.
Reassured Advice can help you compare executive income protection quotes from some of the UK’s leading providers.
We have a complete executive income protection guide if you require more information »
Income protection for self-employed people can be taken out through Reassured Advice from just 20p-a-day.
However, the exact price that you pay will depend on your personal circumstances.
You’ll need to provide the following personal details during the application process:
The following details about your policy will also impact the price that you pay:
Providers will assess your level of risk using the factors listed above and your premium will be calculated accordingly.
The pricing table below shows example quotes for a self-employed worker.
Quotes are based on a non-smoker, in good health, with a low-risk occupation and an annual salary of £40,000. The policy term is until age 65, with a 3 month deferred period and a 1 year payment period:
|Age||Price per month|
While the quotes above help to give an idea on pricing, the cost of your policy can vary significantly depending on your line of work.
For example, a self-employed construction worker will likely pay more than a self-employed graphic designer due to the greater risk involved in this occupation.
Comparing quotes is essential in securing the most affordable cover for your personal circumstances.
Why not let Reassured Advice save you time and money by helping you do this?
Their whole of market comparison service can provide you with quotes from top UK providers, as well as smaller specialists. Simply get in touch.
Income protection can cover self-employed workers for a wide range of illnesses and injuries.
As there’s no set list of conditions which are covered, as long as you meet your policy’s definition of incapacity, you can claim for anything that leaves you unable to work.
In 2021, leading provider LV= found that the most common reasons for claiming on an income protection policy included:
To fully understand your policy (and what you’ll be covered for) why not contact Reassured Advice?
A friendly member of the team can take you through all the terms and conditions to ensure the policy you choose is right for you.
Up to 70% of your self-employed income can be paid out in monthly, tax-free, payments.
As someone who is self-employed his percentage will be based off your net profit.
If securing an executive income protection policy, up to 80% of the insured person’s income could be paid out.
Income protection will start to pay out once the deferred period has come to an end.
The deferred period will be established during the application process and is typically 4, 8, 13, 26 or 52 weeks.
After the initial claim has been made, you’ll still need to be unable to work in order for your payments to commence.
For example, if you opt for a 4 week deferred period, you must still be unable to work after 4 weeks for your policy to start paying out.
Some policies will offer a ‘back-to-day-one’ deferred period which could be particularly beneficial for the self-employed.
A back-to-day-one deferred period which can allow you to claim and start receiving payments within just a few days. Not all providers will offer this option.
Compare quotes through Reassured Advice to find the best policy to meet your needs, including providers who offer a back-to-day-one deferred period.
If you’re the owner of a limited company and you secure an executive income protection policy, the premiums will be paid for by the business and could be classed as a business expense.
This would make them tax-deductible.
The premiums paid on a personal income protection policy can’t be treated as a business expense as they are paid for out of your own money.
However, the payments you receive from a personal income protection policy are tax-free.
Income protection is just one of the ways you can protect yourself as a self-employed worker. You may also wish to consider other forms of financial protection, such as:
Reassured Advice can help you compare income protection, life insurance, family income benefit and life insurance with critical illness.
An expert member of the team can provide you with all the information you need to know about each policy, allowing you to secure the right policy (or policies) to meet your needs.
Simply get in touch for your free quotes.
Income protection can be a vital financial support for those who are self-employed who don’t benefit from traditional sick pay benefits.
By securing income protection you can ensure that you keep up to date with all your essential monthly outgoings without having to rely on others, make cutbacks or return to work before you’re ready.
It could also be possible to secure executive income protection, if you’re the owner of a limited company, to provide financial protection to an employee.
Through Reassured Advice it’s possible to compare both personal income protection plans and executive income protection.
All quotes are personalised, fee-free and no-obligation, so get in touch today to explore your options.
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