If you’re self employed then you could find that your income dries up if you’re unable to work through accident or sickness. Making sure that your income is protected so you can pay your mortgage and support your family should therefore be a priority.
But what are the main benefits of income protection for self employed people? And what should you look for when you compare self employed income protection cover?
The main benefits of income protection for self employed
Income protection for the self employed is designed to provide financial support if you are unable to work due to accident or sickness.
These policies will pay a monthly income until you return to work or for a fixed period (typically 12 or 24 months).
While income protection insurance for self employed workers typically only covers part of your income – around 50 to 60 per cent – it can help you maintain your mortgage payments and other financial commitments in the event that illness or injury prevents you from working.
What to look for in the best self employed income protection policy
When searching for unemployment protection self employed workers are advised to take a number of factors into account. These include:
The maximum amount of cover that you can buy
- Any minimum and maximum age limits
- The cost of cover
- The deferred period
When you compare self employed income protection cover it is a good idea to establish exactly how much cover you can buy. If you’re looking to maximise your protection then you will need an insurer that allows you to insure a high percentage of your self employed income.
You’ll also need to ensure that you can buy the amount of cover that you need. This is because some insurers limit the annual benefit to around £15,000 -18,000. You should also find out what criteria an insurer will use to establish your insurable income and check whether any minimum or maximum age limits apply to the policy you’re buying.
When looking for the best self employed income protection policy then the cost is likely to be a key concern. Comparing the price of premiums between a range of leading insurers can help you obtain competitive terms for your cover.
Additionally, you should find out how long the policy will pay out once you place a claim, and thoroughly check both the eligibility criteria and terms and conditions to ensure that you will be able to claim if you need to.
Finally, you should check the deferred period on your policy. This is the amount of time you have to wait before you can make a claim and it is typically 4, 13, 26 or 52 weeks.
Generally speaking, the longer your deferred period, the lower your monthly premium. However, if you choose a lengthy deferred period you should make sure that you have sufficient savings to meet your financial commitments in the interim.
Comparing your options and choosing the most affordable income protection insurance policy that provides quality cover is the only way to ensure that you will be able to claim as and when you need to.
