Are you self-employed and need affordable financial protection?

Being self-employed can mean having to complete more paperwork, but we can take the stress away from arranging your life insurance.

Extra precautions are required to ensure the financial protection of your loved ones.

Life insurance is a cost-effective option many self-employed people take to ensure future financial stability.

The good news is, arranging comprehensive life cover doesn’t have to be a difficult endeavour.

At Reassured, we can compare quotes on your behalf and help you secure the right policy to meet your needs from just 20p-a-day.

Contact our award-winning, FCA registered team today to get your free quotes.

Keep reading to learn about how best to protect your family with life insurance for self-employed…

Types of insurance for self-employed

There are a number of extra layers of financial protection those who are self-employed should consider.

This is because when you're self-employed you don't benefit from either sick-pay or death in service from an employer.

The most common forms of insurance cover for self-employed workers include:

  • Life insurance
  • Income protection
  • Health insurance

A life insurance policy provides your loved ones with a large cash pay out if you were no longer around.

You can set the cover amount to clear significant debt, such as clearing your mortgage.

Income protection, on the other hand, provides an ongoing payment to cover the loss of salary if you were unable to work for a period of time.

Whereas, health insurance provides the policyholder with a pay out to cover the cost of medical, surgical or dental expenses.

Each of these options offers varying levels of cover and are better suited to different scenarios within the life of a self-employed worker.

In the ideal world, it would be beneficial to secure multiple policies. For example, life insurance to clear the mortgage and income protection to cover you if off work. However, most of us are on a budget.

To obtain your free life insurance quotes and ensure your family are protected get in touch.

Life insurance vs income protection

As discussed, life insurance and income protection differ both in terms of what they cover and when they pay out.

Income protection provides a regular payment whilst you're alive and ensures your family don't experience financial strain if you're incapacitated and unable to work/earn.

Monthly premiums are paid and ongoing monthly pay outs will be made to cover your lost salary if you're out of work due to sickness or injury for a lengthy period.

This is particularly important for those who are self-employed as no sick pay will be received from an employer.

It can help with mortgage repayments and living costs, allowing your family to maintain their current standard of living, limiting the financial stress of losing your salary.

Life insurance, on the other hand, provides a lump sum pay out to your loved ones if you were to pass away.

Not only would your passing result in a loss of income, but your loved ones would also be required to cover the cost of your funeral.

A life insurance pay out could be used to cover the above elements, paying off the mortgage and potentially leaving behind an inheritance to support your family.

Due to the different advantages of each insurance type, it's likely to be beneficial for anyone in self-employment to enjoy multiple forms of cover.

We don't currently provide income protection at Reassured, but to obtain your free life insurance quote, get in touch.

Life insurance vs health insurance

As with income protection, health insurance and life insurance cover different elements within your life and are, therefore, better suited to different scenarios.

Whilst life insurance pays out if you were to pass away, health insurance pay outs if you require medical, surgical or dental treatment.

It pays for privately funded treatment and offers different tiers which will affect what types of treatment are covered.

With the option of the NHS, it's often deemed that health insurance is less important than life insurance.

You can receive medical treatment without health insurance, however, your loved ones won’t receive financial aid without life insurance if you pass away.

In some instances, budget permitting, many who are self-employed will opt for having both types of cover simultaneously.

We don’t currently sell health insurance at Reassured but get in touch to obtain your free life insurance quotes.

Is life insurance worth getting if you're self-employed?

Generally speaking, having adequate life insurance is beneficial for anyone with dependants, (partner and/or children).

Without life cover, if the worst were to happen, your loved ones would have to:

  • Replace a lost income - £231,713 average cost of raising a child[1]
  • Meet mortgage repayments - £121,687 average UK mortgage debt[2]
  • Pay for full-time childcare - £222.36 the weekly cost for full-time childcare[3]
  • Cover the cost of your funeral - £9,493 average total cost of dying[4]

Life insurance can cover all the above and more, reducing the financial strain on loved ones at an already stressful time.

For those who are self-employed, life insurance protection is generally deemed even more important.

Many individuals in employment receive death in service. This is a benefit paid by the employer to your family if you were to pass away, (usually a multiple of your annual salary).

Due to the nature of being self-employed, this benefit isn’t available, meaning if the worst were to happen, your loved ones wouldn't receive additional financial aid, other than from your estate.

Even in instances when your estate is sufficient to cover the cost of your funeral and support the family, the value of your estate will still need to go through probate.

This process can take months, sometimes years, adding to the financial strain on your loved ones after your passing.

Life insurance (if written in trust) can bypass this process, resulting in a faster and sometimes more substantial pay out.

Equally, the nature of many self-employed jobs tends to be riskier.

Examples include:

  • Bricklayer
  • Carpenter
  • Electrician
  • Plumber
  • Labourer
  • Roofer
  • Painter & decorator
  • Taxi/Uber driver

The increased risk of these professions makes the need for life insurance even more significant.

For applicants considered high-risk by insurers, Reassured also have a dedicated impaired risk team.

Our specialist impaired team have helped secure cover for 45% of people declined elsewhere.

Do you need self-employed life insurance?

Self-employed life insurance isn't a product in its own right.

For all intents and purposes, cover for those who are self-employed doesn't differ from those in employment.

The same policy types are available, with the same level of cover.

The best type of life insurance won't depend on whether you're self-employed or not, but what it is you want to protect.

Anyone who has dependants is likely to benefit from having some form of life insurance and as discussed above, this benefit is amplified for those in self-employment.

To secure the right cover protection for you, contact us to compare quotes and save money.

How much is life insurance for self-employed?

At Reassured, we can arrange self-employed life insurance from as little as 20p-a-day.

The cost of all life insurance is determined by the level of risk you pose to the insurer.

Key factors taken into account include:

  • Profession
  • Type of cover
  • Amount of cover

These elements will be assessed and the cost of your life insurance premium calculated accordingly.

The higher the risk you pose to the insurer, the more expensive your premiums will be.

As discussed, many self-employed professions entail a greater risk; working from heights or heavy loads etc.

Therefore, it's common for your profession to play a factor in the cost of your life insurance.

To determine the exact amount you'll pay for life cover and to secure the best deal, get in touch.

How much life insurance do you need if you are self-employed?

The level of life insurance cover you need should be based on the financial aid your loved ones would require if you were no longer around.

Only you can answer how much life insurance you require, as no two scenarios are the same.

You should consider what aspects of your life you want to protect and your personal circumstances:

What it is you want to protect?

  • Self-employed salary
  • Mortgage debt
  • Rental expenses
  • Family living costs
  • Childcare costs
  • An inheritance
  • Funeral costs
  • Outstanding debts

Your personal circumstances?

  • Mortgage balance
  • Number/age of children
  • Partner's employment status
  • Savings/assets

How long do you need cover?

  • Until your mortgage is paid off
  • Until your children are financially independent
  • Until you retire

For help determining the level of cover you require, get in touch with our team today.

We can guide you through the process to ensure your loved ones are comprehensively protected.

How much life insurance do you need?

Enter your financial commitments to understand the level of cover you require.

?

£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.

£
?

According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.

£
?

The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.

£
?

You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.

£
?

According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.

£
?

If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.

£ -

Your total cover estimate

£ 0

Let us find your best quote.

What is the best life insurance for self-employed?

The best life insurance for you isn't dependant on whether you're self-employed or in employment.

Instead, it's based on your individual circumstances and what aspects of your life you want to protect.

There are a number of different policies available, each better suited to protecting different aspects within your life.

Keep reading to determine the best type of life insurance to meet your unique needs…

Life insurance policies for self-employed

As discussed, there are a number of policies available to those who are self-employed, each better suited to protecting particular aspects within your life.

1. Term-based life insurance

Term-based life insurance provides cover for a specified period of time.

If you were to pass away during this period a cash pay out will be made to your loved ones.

There are two common types of term cover:

Level term life insurance provides a pay out which holds its value throughout the life of the policy.

As a result, this type of cover is ideal for covering fixed costs such as; an interest-only mortgage, funeral or an inheritance.

Decreasing term life insurance, in contrast, provides a lump sum pay out which reduces in value during the policy term.

Therefore, it's best suited to covering costs which reduce over time, for example, a repayment mortgage.

Because the risk to the insurer reduces over time, decreasing term cover is cheaper than level term.

At Reassured, we can help you compare both level and decreasing term life insurance quotes.


2. Family income benefit

Family income benefit is a term-based policy which provides your loved ones with ongoing, tax-free monthly payments.

It's ideal for replacing your lost income if you were no longer around to provide and eases the strain of ongoing monthly budgeting.

Upon your passing, your family will receive continued payments until the policy ends.

Due to the diminishing risk to the insurer with regards to family income benefit, premiums tend to be relatively cheap.

To obtain your free family income benefit quotes, contact us today.


3. Whole of life insurance

Whole of life insurance is similar to level term life insurance.

The pay out sum remains fixed but here cover lasts for the rest of your life.

This type of cover is best suited to those in later life who are in good health.

This is because medical information is taken into account when calculating premiums and it's possible to pay more into the policy than it'll pay out.

To arrange whole of life cover, contact Reassured for your free quotes.


4. Over 50s life insurance

Over 50 life insurance offers guaranteed acceptance to UK residents aged between 50-85 and requires no medical information.

The sum assured (cover amount) is significantly lower than other policies due to the unknown risk to the insurer.

As a result, over 50s life insurance is best suited to those in later life who suffer from less than favourable health, who want to cover funeral costs.

To arrange an over 50s policy or to determine if this is the right cover for you, contact Reassured.

Joint life insurance for self-employed

On average, arranging joint life insurance can save 25% compared to paying for two single policies.

However, there are a couple of things to consider before opting for joint cover simply to save money.

Joint life insurance, whether you're employed or self-employed, only pays out upon the first death.

This means that if one partner passes away, cover expires, and the surviving partner is left having to arrange new protection when older - resulting in higher premiums.

Equally, if both partners pass away simultaneously, the singular pay out sum may not be sufficient to cover the financial loss of both, especially if the policyholders were parents.

As a result, to ensure adequate financial protection, if budget allows, it's likely to be more beneficial to obtain two single policies.

Secondly, as previously discussed, many self-employed professions take place in higher-risk industries, resulting in increased premiums.

In the instance of joint life insurance, this can increase the average premium cost, resulting in the lower-risk policyholder paying over the odds for their half of the cover.

As a result, it's always recommended to compare quotes for both joint and two singular policies to determine the best option.

Contact our team today to see whether joint is the right solution for you.

Is life insurance tax deductible for self-employed?

Life insurance is a personal form of insurance and therefore, is not connected to your status of being self-employed.

As a result, it can’t be deducted from your tax during your self-assessment tax return.

Self-employed life insurance with terminal illness cover

Most life insurance policies arranged through Reassured come with terminal illness cover as standard.

This means, if you're diagnosed with a terminal illness and given less than 12 months to live, you can make an early claim.

The early pay out can then be used to get your financial affairs in order, pay for medical treatment or simply enjoy with family.

Self-employed life insurance with critical illness cover

All policies arranged through Reassured have the option to add critical illness cover.

This allows you to make an early claim on your insurance if you're diagnosed with a serious, yet non-terminal condition.

The pay out could be used for necessary home adaptations, replacing a lost income or simply to enjoy with your loved ones.

Critical illness cover is not to be confused with income protection insurance.

Critical illness cover will provide you with a one-off lump sum, whilst income protection insurance will provide you with ongoing monthly payments for a percentage of your income.

For your quote on self-employed life insurance with critical illness cover, get in touch.

Writing your life insurance in trust

Writing your life insurance policy in trust comes with certain key benefits:

  • Reduce/ avoid 40% inheritance tax, (40% over £325,000)
  • Bypass the probate process, (for faster pay out)
  • Specify how you wish the proceeds to be distributed

At Reassured, we provide a dedicated free trust writing service...

Reassured’s free trust writing service

Writing your life insurance policy in trust doesn’t have to be challenging.

At Reassured, we're proud to offer all our self-employed customers a free trust writing service.

A member of our dedicated team can take you through the application process, answering any questions and providing complete peace of mind.

Self-employment in the UK

Since 2001, the number of self-employed workers in the UK has risen by 1.5 million and now makes up 15% of the workforce[5].

Whilst this rise has occurred across both genders, the increase has been more prevalent amongst men (3.2 million) than women (1.6 million).

The most popular age bracket for self-employed workers is 45-54 years, an age at which many still have large financial commitments – highlighting the need for life insurance.

To ensure your loved ones are protected, contact us to compare insurers.

Other types of insurance for self-employed workers

Although we specialise in life insurance, if you're self-employed you may benefit from other policy types:

  • Professional indemnity insurance
  • Equipment insurance
  • Public liability insurance
  • Product liability insurance
  • Buildings and contents insurance

What cover you need will obviously depend on the sector you work in.

Compare life insurance for self-employed quotes, (save money)

The cost of self-employed life insurance can vary significantly between insurers.

At Reassured, our award-winning team compare quotes from multiple insurers to secure you the best deal.

We can also help you write your policy in trust and minimise/avoid 40% inheritance tax.

And our award-winning broker service is completely free to you.

If you're self-employed, you work every day to build your business and provide for your family.

But ask yourself, are you protected and have you secured the financial future of your loved ones?

Get in touch to secure your free quotes and take one step closer to protecting your family.

Sources:

[1] http://www.childhoodbereavementnetwork.org.uk/research/key-statistics.aspx

[2] https://themoneycharity.org.uk/money-statistics/september-2017/

[3] https://www.moneyadviceservice.org.uk/en/articles/childcare-costs

[4] https://www.sunlife.co.uk/costofdying2020

[5] https://www.statista.com/statistics/318458/united-kingdom-proportion-of-self-employment-by-gender/

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