As a self-employed person, you do not have an employer paying you if you’re sick or have an accident and are unable to work; and if you have a family, you don’t have the death in service benefits that came with employment.
This does not mean that you have to go without these plans – leaving yourself, your family and your business in a potentially vulnerable financial position.
The plans available can take into account your employment position, ability to prove income, and financial needs.
Many self-employed people therefore take out income protection insurance and critical illness insurance in case they get too sick or injured to work, or get a serious illness. Consideration should also be given to private medical insurance with an aim to get you back to work faster. Life insurance is also common for people who have dependants, such as a partner or children.
For a self-employed person, sole trader or contractor, income protection is potentially one of the most vital insurances you could have as you may only be eligible for the state benefits.
Which option is best for you?
Roxburgh Financial Management provides specialist advice to help you choose from the many protection products available. For example, at no extra cost it could be possible to include cover for your children and many companies now offer cover which will pay out in all events without any exclusions.
Our advisers will help you choose the best option for you and your family at an affordable rate.
Five reasons to use us
1. We offer insurance advice with no obligation
2. We will explain the good, the bad, and the ugly
3. We will ask the right questions
4. We do all the work, right through to helping complete the application form
5. We can access a comprehensive range of insurance providers
Types of self-employed insurance
Taking out the right policy means income protection insurance will provide you with an income should you get injured or become sick and unable to work.
As an example, if you are 35, a non-smoker and in good health, then a premium of around £13 per month would provide you a monthly income of £1,000 for up to one year. For a monthly premium of around £16, you could extend the period so it pays out for up to two years; and for around £25 the plan will pay out up to 33 years (the number of years to state retirement for a 35-year-old).
For the self-employed, getting the right income protection plan is vital because of the way providers will assess you in the event of a claim.
The maximum level of cover available depends on your net profit with proof of this in the form of accounts if you make a claim. Typically, the plans on offer cover between 50% and 65% of these figures, but this can be up to 70% for some. For those where the proof of income is difficult as in the case for start-ups, our specialists will discuss with you those plans that do not require income proof in the event of a claim.
Click here for more details on income protection
Life insurance is a simple and cheap way to help protect you and your family from the financial impact of a premature death by paying them a lump sum amount.
When set up correctly in a trust, a lump sum payment is paid out tax-free on a death.
Click here for more details on life insurance.
Critical illness insurance
Critical Illness Insurance provides a tax-free lump sum payment on diagnosis of a ‘qualifying’ serious illness.
Critical illness insurance is a complex product with exclusions and pay-outs varying greatly from insurer to insurer. Typically, all insurers cover illnesses such as cancer, heart attack, stroke, Alzheimer’s and multiple sclerosis. A comprehensive policy can cover you for over 170 ‘qualifying’ illnesses, a typical one less than 50 so it pays to talk to an adviser to ensure you get the best policy for your budget and health concerns.
As an example, if you are 30, a non-smoker and in good health, then a premium of around £50 per month would provide you a lump sum amount of £175,000 upon your premature death or diagnosis of a serious illness before the state retirement age of 68.
Click here for more details on critical illness insurance.
Private medical insurance
Private medical insurance is designed to take you out of the NHS system and into private medical care; which then means that your waiting time is significantly reduced, giving you peace of mind that if anything is seriously wrong, you are not waiting a long time to find out and be treated.
You also will have access to drugs and treatments that may not be funded by your local NHS trust thereby aiding you in a swift and speedy recovery.
Amongst other things, it offers cover for early diagnosis and treatment, paying for anything from physiotherapy on a sprained ankle to seeing a consultant about chronic back pain, from diagnostic tests to major heart surgery, or even the latest in chemotherapy treatments.
Click here for more details on private medical insurance.
Roxburgh Financial Management was set up to provide specialist help to people unsure how to go about choosing from the many protection products available.
Our specialists will help you to navigate all the options to find the cover that is right for you and your family at an affordable rate.