Why Income Protection Matters for the Self-Employed
When you're self-employed, your income depends entirely on your ability to work. Unlike employees who may receive statutory sick pay or company sick pay, self-employed workers have no employer safety net to fall back on.
If illness or injury prevented you from working for weeks, months or even longer, the financial impact could be significant, not just for you, but for your family and anyone who depends on your income.
What Is Income Protection?
Income protection is an insurance policy that pays a percentage of your income if you're unable to work due to illness or injury. Unlike critical illness cover, which pays a one-off lump sum for specific conditions, income protection can pay out for any condition that prevents you from doing your job.
Payments typically continue until you return to work, reach retirement age, or the policy ends, depending on the type of plan you choose.
How Much Does Income Protection Cost?
The cost depends on several factors, including your age, health, occupation, the amount of cover you need and the deferred period (the waiting time before payments begin). Choosing a longer deferred period can reduce your premiums significantly.
Key Considerations for Self-Employed Workers
- No employer sick pay, you need to fund your own safety net
- Business expenses, some policies can cover fixed business costs as well as personal income
- Tax relief, premiums for personal income protection are not tax-deductible, but the benefit is paid tax-free
- Deferred period, align this with any savings buffer you have
Next Steps
If you're self-employed and don't have income protection in place, it's worth having a conversation about your options. The right policy can provide genuine peace of mind and financial security.
Book a free consultation to review your protection needs, or try our book a free consultation for a quick estimate.
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