Income Protection For The Self-Employed

Financial protection is arguably more important for the self-employed, as they will not have any sick pay or employee benefits to fall back on. Therefore, products such as Income Protection and Critical Illness Cover are crucial to protect from the unforeseen complications that can arise from a long-term and/or serious illness.

Meet Taylor:

Taylor was previously employed at a large utility company that offered a range of employee benefits, including generous sick pay. A few years into his employment, Taylor, unfortunately, suffered a back injury and had to take time off from work as a result.

n order to cover his monthly bills, Taylor was eligible for sick pay which gave him his normal salary. However, the cover only lasted for three months and Taylor was sick for a further two and therefore had to dip into his savings. Further into his career, and since starting a family, Taylor went on to start his own business as a self-employed Heating Engineer and was looking for some advice on how to better protect himself should he ever fall ill again and need to stop working.

After realising he was now only eligible for statutory sick pay, currently at £99.35 per week – which is considerably less than what he could claim through his previous employer – it was decided that an Income Protection policy would be the best way to protect his income as a self-employed business owner.

Since then, Taylor had an accident and he broke his leg badly, meaning he had to take time off from his business. He was able to claim 60% of his gross profit based on the previous year’s earnings which allowed him to meet his financial obligations and support his family, whilst concentrating on getting better before returning to work.

Income protection is arguably the most important insurance someone of working age can buy. If your income ceases due to ill health, whether physical or mental, you may soon deplete your savings and be unable to cover your expenses, making income protection an indispensable lifeline. However, all too many people choose ‘off the shelf’ protection products or visit comparison websites without getting proper advice first. It is crucial to ensure the right advice is sought, otherwise, you could be paying for cover that will not be right for you.

It is also equally important to ensure that any plans you do have in place remain relevant to your individual circumstances, again to ensure that your requirements are met should you need to make a claim.

Get in touch with one of our Independent Financial Advisers today to discuss your circumstances and how we can help you plan for the future, whatever it may hold. Call 0117 450 1300.

For more information, download our complimentary PDF guide to Financial Protection here:

The Importance of Financial Protection Guide by Integrity365, Independent Financial Advisers