05/01/2017

Income Protection And Self-Employment

Nobody likes to think that they might one day find themselves without employment and therefore income.

In the case of the self-employed, that dread may be all the more pronounced due to the fact that even though you can’t lose your job through things such as redundancy, you may very well find yourself unable to work through sickness etc.  Unlike conventional employees, there is no employer who is going to pay you sickness benefits in such a situation.

Here are some classic questions that arise in this context from people who are self-employed.

How can I obtain an income if I am sick and unable to work?

The harsh reality of life is that you may have only two realistic options:

  • to draw upon your own financial resources and savings;
  • to obtain the help and support of an insurance policy sourced from a specialist provider such as Drewberry Income Protection, taken out specifically to cover you for such eventualities.
It might be unwise to hope for much, if any, assistance from the state.  Such help is extremely limited and even if provided, likely to be of very small amounts of money.

How does income protection insurance work?

It is typically easy and straightforward.

You simply select a policy of the type and benefit basis that is suitable for your occupation and your financial requirements.

For example, some policies may pay out for a period of 12 months but others for 24 and yet others may be of longer duration.  The cover you select will inevitably have an effect on the price you pay but needs to be matched to issues such as your lifestyle and financial situation.

Can anyone get this sort of cover?

In principle, yes, but there may be some exceptions.

For example, if you have a particularly hazardous occupation then you may find it difficult to obtain this type of insurance protection.  Another example might be individuals who are already suffering from a serious medical condition.

However, you may be surprised at how flexible insurance providers can be and how they may have policies tailored to many sorts of individual employment environments.  It is always worth talking to an experienced provider and asking what they may be able to offer in your particular circumstances.

Can I get cover for any sort of condition or circumstance that may arise?

No. You may find that no sort of insurance policies will ever unconditionally promise to cover any conceivable situation you may find yourself in.

Typically a policy will cover and exclude a range of specified circumstances and you need to be sure that this is suitable for your needs.

For example, you may find that such policies exclude being unable to work for reasons due to your participation in a criminal activity etc.

Once again, your insurance provider will typically be only too willing to highlight all exclusions and things you need to be aware of in this respect.