Self-Employed Income Protection

Self employed man working in his restaurant

What is income protection?

Income protection insurance is a type of policy that will pay out a monthly lump sum if you are unable to work due to an illness or injury.

It is a tax-free benefit that can help cover every-day costs, like the mortgage, bills, and other general outgoings, meaning that you can focus on recovering rather than getting stress about how you’re going to pay everything on time.

Becoming ill or injured can happen to any of us at any time, and if your family rely on your income to get by, income protection cover is definitely worth getting. As well as protecting you financially, it’s also about protecting your loved ones should something happen to you.

Income protection for the self-employed

Both those who are employed and those who are self-employed workers in the UK can apply for income protection.

For those in full-time or part-time employment, you may already have a sick-pay scheme in place to fall back on. However, many do not and people who are self-employed are very unlikely to have anything like this in place to protect them financially.

Some people may rely on the government-run sick pay scheme Statutory Sick Pay (SSP) to cover them when they get sick or injured and need time off work, but with the weekly allowance standing at £92.05 (which works out at £13 per day), most people feel that this is not sufficient to help support a family and pay for necessary outgoings.

This is where income protection for the self-employed becomes a very important consideration.

Do I need self-employed income protection?

At Unite Life, we highly recommend getting income protection insurance if you are self-employed and don’t have any sick pay schemes in place. While you may assume that nothing will happen to you, no one knows that for certain and an accident or illness could leave you struggling financially for weeks, months or even years.

Say, for example, that you are a self-employed carpenter and you were suddenly involved in an accident that left you with broken arms and injured hands, along with other multiple injuries, meaning you couldn’t work for 3 months until you healed, would you or your family be able to cope without your income?

Getting income protection insurance means you have the peace of mind knowing that everyone is protected financially should something happen to you.

How does income protection work for the self-employed?

Like a regular income protection insurance policy, income protection for the self-employed works in a similar way. You get a regular payout (tax-free income) if you are unable to work because of an injury or illness.

Income protection covers a percentage of your income; generally, you will receive between 50% and 70% of it, tax-free. When it comes to being self-employed, however, the payouts are calculated based on how much profit you make before tax each year.

Self-employed income protection insurance will pay out for however long you choose, whether that’s short-term (maximum of 12 months) or long-term (until retirement).

When you receive these tax-free payouts, you can use them as you wish – to pay the mortgage, the food bill or any other expenses you need to pay for while off work.

At Unite Life, we can help find a policy for you that fits in-line with your own personal circumstances and needs. Don’t hesitate to get in touch today for an obligation-free income protection quote!

Self-employed income protection insurance with Unite Life

If you are self-employed and want to know more about income protection so you are covered financially if something goes wrong, contact us at Unite Life.

At Unite Life, we are an insurance broker partnered with some of the best income protection insurance providers in the UK. This allows us to comb through all the policies available to find the cheapest deal and the best one suited to you and your needs.

Our advisors are experienced, friendly and always happy to help answer any questions you may have regarding insurance, so don’t hesitate to get in touch with us today, obligation-free!

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