Personal Insurance when you are Self Employed

If you’re self-employed, it’s important to consider your personal insurance options. This is because when you’re self-employed you don’t have an employer to rely on for sickness cover, or health insurance, for example. This guide will help you work out what you need and where to get it.


There are a range of personal insurance products worth considering if you’re self-employed.


Income protection:


This is a long-term insurance policy, that usually lasts many years and is designed to support you if you can’t work because you’re sick or injured.


It aims to replace part or all of your previous after-tax income. It is intended to pay out monthly payments up to your normal retirement age if you lose your job through illness or injury.


Critical illness cover:


This is a long-term insurance policy which usually pays out a tax-free lump sum if you are diagnosed with one of the serious illnesses covered by your policy. These usually include some cancers, heart attack and stroke.


It is designed to pay off debts, or a mortgage, or pay for any alterations needed to your home – for example, so you can use a wheelchair.


Only selected conditions are covered by these policies. Common illnesses that keep people off work such as back problems and stress are not covered.





Life insurance:


This insurance will pay your dependants a lump sum, or regular payments, if you die.


You might have had life insurance as part of your package if you were employed – this is often known as death-in-service benefit. This will have ended when your employment stopped.


Life insurance is worth thinking about if you have children or other dependents you look after or who depend on you financially. You can’t rely on the government to take care of your family – the money they would get from the state is much lower than most people expect.



Private medical insurance :


This insurance can supplement what’s available on the NHS.


Some self-employed people choose to take out medical insurance because they want to guard against being off work and losing earnings if waiting for NHS treatment.


Your employer might have offered this health insurance as an employee benefit, but once you become self-employed you’re no longer eligible for it.


If you can afford the premiums, it may be worth considering as it gives you a choice in the level of care you get and how and when it is provided.

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