Income protection insurance will pay a monthly pay-out to those not able to work as a result of sickness or accident.
This insurance product is accessible for those who are traditionally employed as well as for those who are self-employed and can be very beneficial if sick pay and other traditional benefits are not available.
Claybrooke can help to compare different income protection insurance policies for the self-employed from different providers across the United Kingdom.
Why You May Need Income Protection for the Self-Employed
When moving from traditional employment to being self-employed, having insurance to protect your income is a vital policy to have. Employers generally offer company sponsored sick pay and/or sickness insurance.
Becoming self-employed adds the complexity of determining how to cope in a financial sense should you be not able to work as a result of an injury or illness. Self-employed income protection insurance is suited for those who run their own company or work for themselves.
The government does provide an allowance for those who are not able to work, which is just over £100 a week – this is sometimes not enough to cover expenses and bills from one month to the next. With income protection policies for the self-employed, it is possible to receive approximately 50 to 70 percent of the income that was being earned should you be not able to work for some reason.
How Income Protection for the Self-Employed Works
Income protection insurance works the same for those who are self-employed as it does for those who are traditionally employed. Self-employed income protection will provide the policyholder with a monthly pay-out when he or she is not able to work as a result of an accident or illness, which can be used to cover monthly expenses.
In the United Kingdom, self-employed income protection policies will usually cover approximately 50 to 70 percent of the previously earned income.
It is important to note that, although self-employed income protection and traditional income protection are very similar, how the policyholder’s income is calculated and the percentage received will vary – this is usually based on the person’s share of annual profits before taxes.
But, like traditional income protection products, the policyholder will be able to use the monthly payment for things such as monthly bills, mortgage payments, or to pay personal loans.
Length of Self-Employed Income Protection Policies
Like traditional income protection policies, a self-employed income protection policy will fall into one of two different categories – either long-term protection or short-term protection. Long-term protection policies will pay benefits to the beneficiary for as long as needed or until the policy term has come to an end (typically retirement) and the short-term income protection policy will only pay benefits to the beneficiary for a period of up to 12 months.
Information on Unemployment Insurance for the Self-Employed
Those who are self-employed are often interested in purchasing unemployment insurance – while this is an option, the criteria to qualify for this policy are often much stricter for the self-employed. The criteria for making a claim for self-employed workers is often hard to prove, since they must be able to identify the business has stopped but not because of the worker. For those who are interested in learning more, the advisors at Claybrooke can help to explain unemployment insurance in detail.
Using Claybrooke to Compare Policies
Visiting each individual provider for self-employed income protection insurance and comparing quotes can be an enormous amount of work, which is why the professionals at Claybrooke are here to help.
Our knowledgeable team will use our specialized system for comparison to help match policy seekers with an insurance product that will fit both their needs and their budget. A Claybrooke advisor can help to walk policy seekers through the process and explain the details of the policy every step of the way.