Income Protection Insurance for the Self-Employed

Setting up on your own can be daunting for many, mostly due to the uncertainty and risk of an unstable income, especially during the early stages. It’s what puts so many people off taking the ‘leap of faith’ to start their own business.

Company sick pay is one of the several things you lose when you’re self-employed or a contractor, and if you have dependents to think about or looming mortgage payments, it can be a very scary situation. However, there is a helping hand, in the form of income protection insurance.

If you are self-employed and find yourself unable to work due to sickness or disability, income protection insurance is a safety net for you, your family and your business.

What is Income Protection Insurance?

Income protection insurance gives you money each month if you’re ill or injured to the point where you can’t work. It helps recoup some of your lost earnings so you don’t fall behind on bills and other outgoings while you recover. This lets you focus on getting better, and back into the swing of things.

There are various levels of income protection insurance available, across both short-term and long-term cover. Short-term cover will run for a set amount of time, and you’ll receive payments until you begin working again or when this set period ends.

Long-term income protection will cover you until you’re able to return to work or until you reach retirement age.

Income protection insurance can greatly reduce the risks and concerns associated with being self-employed, and fills the void that losing statutory sick pay left behind.

Before taking out income protection insurance, you should ask yourself if you’ll still be able to look after yourself and your loved ones financially if you’re ill or injured. Consider if you have anything else to help you get by, like savings or family. It can be useful to calculate your monthly outgoings and living costs to work out how much you’d need to get through a set period of time without work

What Types of Claims Am I Covered For?

Income protection insurance won’t cover every type of illness, and you may not be covered for certain things which you or a member of your family has had before. These are determined through pre-existing medical conditions, and insurance will look at your family medical history to identify any potential exclusions. Ultimately, it depends on what time of income insurance you go for. Some of the best policies will pay out to cover your:

Rent
Bills
Mortgage Payments
Living Costs
Outstanding debt commitments

However, it may not cover you for everything, for example you may not be able to use it for:

Costs associated with your business e.g. office space, suppliers, employee salaries
Large debts if you receive payments in a lump sum. The money is intended to cover your monthly personal expenses

Policies often won’t cover your full salary, so you will have to cope on a slightly reduced income.

How Dead Simple Insurance Can Help

At Dead Simple Insurance, we know what policies you need to protect your employees, yourself and most importantly: your business. We can help you find the best prices from reputable providers, taking the hassle out of insurance.