INSURANCE

Income Protection Insurance for Self Employed

Income protection insurance for self employed may be especially valuable to this group of professionals. If you are self employed, you cannot rely on receiving paid sick leave through a company. In addition, if you are unable to work due to an illness or injury, you may have no means of running your business or covering your expenses whilst you are incapacitated. The self employed require additional protection such as income mortgage insurance to cover themselves against the potentially disastrous consequences of unemployment.

There is no restriction against applying for income protection insurance if you are self employed. However, an insurer may require that you have been self employed for at least six months in the same capacity before you may receive a payout. As long as you continue to pay your insurance premiums, you may not be denied coverage when your policy comes up for renewal. Income protection insurance for self employed can protect your financial interests until you are able to resume working again.

Claims and Benefits

If you are severely injured or diagnosed with a serious illness that prevents you from working, you may make a claim on income protection for self employed. You will be asked to provide your policy number, the date of your unemployment, the reason for your unemployment and other questions related to your illness or injury. Once your claim has been approved, you will receive payouts weekly or monthly as soon as the deferred period ends.

The deferred period is the length of time between the last day you are able to work and the date your payouts start. As the insured, you have the option to set the duration of this period. You may receive larger payouts if you extend the deferred period; however, you must have the resources to cover your expenses during this time. Benefits from income protection insurance for self employed continue until the coverage period lapses or until you resume work, retire or pass away.

Income protection insurance can prove extremely useful for the self employed, as these individuals are not eligible for Statutory Sick Pay, or SSP. SSP benefits are paid out to traditional employees who are unable to work because of an injury or illness for 4 consecutive days. Professionals who work for themselves may apply for Employment and Support Allowance, or ESA. Benefits are based upon your National Insurance contributions or upon your income if you have not made contributions.

ESA benefits can be helpful to households that have experienced a loss of income. However, these benefits are rarely sufficient to cover all of the needs of a family. Income protection insurance for self employed gives you the financial support you need to continue paying off your mortgage, car loan, personal loans or credit cards. Payouts generally constitute up to 70 percent of your gross earnings, dependent on how much you earn.

Income protection insurance for self employed must not be confused with interruption protection for a business. Your operational expenses may be covered by business interruption insurance, a commercial product that helps proprietors cope with an eventuality that stops their operations. Compare your options carefully by consulting several qualified insurers to compare costs and benefits of private versus business policies. You may benefit by investing in separate cover for your commercial interests.

Costs of Income Protection Insurance

The cost of income protection insurance for self employed is based upon certain risk factors that the applicant presents to the insurer. Your age, health condition, pre existing medical conditions and the type of work you do will affect your rates. Over the years, your premiums may rise as you grow older, especially if you have a decline in health. If you switch from a low risk occupation to a high risk job, you may also pay higher rates as a result.

With traditional fixed premium income protection insurance for self employed, you pay the same premium each month throughout the coverage period. With reviewable or renewable policies, you may pay lower premiums in the beginning of your coverage. However, each time your cover is renewed, generally every 5 years, your rates will nearly always rise. With increasing IPI, you may expect larger payouts over time to accommodate higher costs of living, but you must pay higher premiums to have this option.

Income protection insurance for self employed is essential for professionals who work for themselves, as they must assure their own financial stability without the support of a traditional employer. IPI benefits may make the difference between maintaining a comfortable standard of living and suffering severe losses during a period of unemployment. Professionals who run their own business may recover their financial status more quickly after an illness or injury if they've protected themselves with income protection insurance for self employed.

We're Protected. Are You?

Get Quotes Now