Compare Income Protection Insurance for Self Employed

What’s income protection for self-employed people?

If you’re self-employed, this type of insurance policy provides the equivalent of sick pay, paying out an income if you’re unable to work due to injury or illness.

It enables you to continue to meet your financial obligations and – depending on how much co ver you choose – could even help maintain your current standard of living while you recover.

Self-employed income protection is also an attractive option if you’re employed in dangerous industries where you’re at a higher risk of being injured and unable to work.

What types of self-employed income protection are there?

There are several types on offer. These include:

How does self-employed income protection insurance work?

After taking out insurance you pay regular monthly premiums to your insurer. If you’re then forced to make a claim due to sickness or injury, it should pay out depending on your type and level of cover:

What are the main benefits of income protection?

The main advantages of self-employed income protection include:

Here’s how to decide if you need income protection.

Are there any downsides to income protection?

The main downside is the cost of paying monthly premiums, although remember you’re paying for peace of mind. If you ever have to make a claim, the policy will have paid for itself. 

Also, personal insurances like income protection aren’t tax-deductible. Some executive plans are tax-deductible, but check before you buy.

What affects the cost of income protection for self-employed people?

Your monthly premiums are determined by several factors, including:

What exclusions are there?

Some of the standard exclusions with income protection policies include illnesses or injuries caused by:

What if I have pre-existing health conditions?

When you apply, be prepared to fill out a medical questionnaire, on which you’ll need to declare any medical conditions you’ve suffered in the past five years.

If you have a pre-existing or chronic condition, the insurer is likely to do one of three things:

You might be able to get this reviewed after a certain period if you don’t seek any advice, medication or treatment for your condition in the meantime.

Claims may be refused or your entire policy invalidated if your insurer checks your medical history and discovers you were dishonest or omitted some vital information.

What other insurance policies are worth considering if I’m self-employed?

The following policies may be of value to self-employed people:

How do I find the best self-employed income protection cover?

Your ultimate aim is to find an appropriate level of cover at the best price, which can be difficult if your income varies each year – insurers will ask you for at least one year’s audited accounts as proof of your income when you apply. Before using our comparison service, consider the following:

One key factor is the amount of cover you need. To work this out, add up all your regular outgoings, then add on any additional expenses you’re responsible for covering, such as food, childcare and even non-essentials such as holidays. Use this to determine what level of cover to buy.