INCOME PROTECTION
FOR SELF-EMPLOYED
You cannot be a superdad without insurance.
Can you get Income Protection Insurance if you are Self-Employed?
Yes, even if you work for yourself as a dad, you can purchase income protection insurance in the UK. Self-employed dads need income protection insurance the most.
Unfortunately, independent contractors lack the financial security of traditional sick pay benefits.
Meaning that many self-employed dads may lose irreplaceable income during times of illness or injury or may have to return to work before fully recovering in order to make ends meet. Self-employed dads can compare income protection insurance in the UK with Daddy Insurance.
Could you manage to pay the bills if you were out of work for a while?
You can find the best income protection insurance to safeguard your earnings from self-employment with the help of Daddy Insurance.
You can get free income protection insurance quotes from our panel of insurance providers.
To compare income protection insurance quotes from our panel of insurance providers, just get in touch with Daddy Insurance.
What is Self-Employed Income Protection Insurance in the UK?
No particular “self-employed income protection insurance” policy exists. This refers to an income protection insurance policy that a self-employed person purchases to safeguard their income.
When you are unable to work due to illness or injury, income protection insurance can help by paying out a portion of your salary.
Until you can return to work, the policy expires, or you retire, it will give you a tax-free monthly income.
This can assist you in meeting significant financial obligations, such as:
- Rent or mortgage payments
- Household expenses
- Living expenses
- Repayment of loans or debt
- Leisure expenses
- Transportation costs
Why Secure Self-Employed Income Protection Insurance through Daddy Insurance?
1
Comparison from our panel of insurance providers to help self-employed dads find the best income protection insurance in the UK.
2
Help & guidance throughout the entire application process. Affordable income protection insurance from Daddy Insurance.
3
Daddy Insurance advice can help you compare other policies as a self-employed dad such as life insurance with critical illness cover & family income benefit in the UK.
4
Personalised, fee-free, & completely no-obligation quotes. UK based team for quick & easy help.
Do you need Income Protection Insurance if you are a Self-Employed Dad?
Your demands and individual circumstances will ultimately determine whether you need income protection insurance as a self-employed dad.
According to reports, if the primary household earner were forced to stop working due to illness or accident, 10.8 million households (or 60% of all working families) would see an income decline of more than a third[1].
While many people in employment may get by with the convenience of statutory sick pay (SSP), self-employed employees must rely on the “new style” employment and support allowance (ESA) and/or universal credit.
There are two categories for the new ESA. You may be eligible to earn £77.00 per week if your illness or injury indicates that you will probably be able to return to work in the future.
Alternately, you could get up to £117.60 per week if your illness or injury means you might find it difficult to go back to work in the future.
Would this be sufficient to cover your living expenses, including your rent or mortgage?
Income protection insurance in the UK can pay you up to 70% of your typical wages in this situation, which is very advantageous. You will get regular (tax-free) payments that will mirror your salary and help you maintain your standard of living.
Compare income protection insurance in the UK with Daddy Insurance.
How Does Income Protection Insurance Work for Self-Employed Dads?
Similar to other income protection insurance policies, self-employment income protection insurance also works the same.
You will have coverage for a predetermined amount of time (the term). During the application process, you and your provider will come to an agreement on this. You are able to select the term of the policy that best suits you, but frequently, coverage must end by the time you turn 70.
Your cover will be paid for by a monthly premium. Your premiums may be guaranteed (stay the same), reviewable (vary over time), or age-banded depending on your coverage (increase each year as you get older).
You may file an insurance claim if you are injured or given a medical diagnosis that keeps you from working. The illness or injury must fall under your policy’s definition of disability. Either personal occupation, appropriate tasks, or any tasks will be included here.
When filing a claim, you must wait until your deferred period is up before receiving benefits. Deferred periods are frequently anywhere from 4 to 52 weeks long. To be eligible for compensation after this point, you must still be unable to work.
If your claim is approved, you may receive monthly (tax-free) payments equal to up to 70% of your yearly self-employment income. At the time you file your claim, this will represent 70% of your income.
What is the best Income Protection Insurance for Self-Employed Dads in the UK?
The best income protection insurance for self-employed dads will depend on your individual circumstances and your available budget.
Income protection policies can be split into two categories:
- Policies with a long-term payment period (also known as full income protection or full term income protection).
- Policies with a short-term payment period (also known as a limited payment period).
Policies with a short-term payment period tend to be cheaper due to the shorter length of time it will pay out to you.
However, the main benefit of long-term income protection insurance is that if you’re incapacitated and can’t work again, it can pay out to you until you reach retirement age.
Depending on which option you choose, you will either get payments for a maximum of one to two years (short-term) or until retirement (long-term).
Why not get in touch with the team at Daddy Insurance if you have any questions or would like more details on how income protection insurance works.
Short-Term Income Protection Insurance
- Can pay out up to 70% of your usual earnings.
- Policy can potentially last until age 70.
- Will pay out to you if you’re too ill or injured to work.
- Payment period can be a maximum of 1 – 2 years.
- Can help you to keep up with essential living costs.
- Due to the shorter payment period, it’s possible to make multiple claims throughout the policy.
- Can be cheaper due to the shorter payment period so can be good for self-employed workers who are on a budget.
Long-Term Income Protection Insurance
- Can pay out up to 70% of your usual earnings.
- Policy can potentially last until age 70.
- Will pay out to you if you’re too ill or injured to work.
- Payment period can last until you reach retirement.
- Can help you to keep up with essential living costs.
- Can allow you to still receive an income if your incapacity results in you being unable to work again.
- Can be an ideal choice for self-employed workers who want more comprehensive cover to last the rest of their working life.
How Much is Self-Employed Income Protection Insurance in the UK?
The cost of your self-employed income protection insurance will vary depending on your personal circumstances.
Providers will take the following factors into account to assess the level of risk you pose and calculate your monthly income protection insurance premium.
Personal factors:
- Age
- Occupation
- Health & wellbeing
- Lifestyle
- Smoking status
Policy factors:
- Policy term.
- Payment period (long-term or short-term).
- Deferred period.
- Definition of incapacity.
- Premium type.
The pricing table below shows example income protection insurance quotes.
Quotes are based on a non-smoker, with a low-risk occupation, who’s in good health. The policy term is until age 65, with a 3-month deferred period and maximum benefit amount.
Age
20
25
30
35
40
45
50
Long-Term Income Protection Monthly
£8.27
£10.17
£12.04
£14.98
£19.56
£28.94
£43.74
Short Term Income Protection Monthly
£5.58
£6.14
£6.41
£6.88
£8.60
£11.00
£14.63
You can see that the cost of income protection insurance in the UK depends on whether you choose long-term or short-term coverage.
It’s also crucial to remember that depending on your line of employment, the cost can vary greatly.
A self-employed construction worker, for instance, will certainly pay more than a self-employed graphic designer because their line of business entails greater risk.
To discover the best coverage for your particular situation, compare income protection insurance rates with Daddy Insurance.
You can receive free quotations from our panel of insurance providers in the UK. Simply get in touch.
How Much Does Self-Employed Income Protection Insurance Pay Out in the UK?
Monthly (tax-free) payments of 50% to 70% of your self-employed income are paid out.
This will be based on a portion of your income at the time of filing the claim, not your income at the time you purchased the insurance.
For instance, if your policy pays out at 60% and your salary at the time of a claim is £40,000, you could receive £2,000 each month (or £24,000 over the course of a year).
Some income protection insurance policies have a “benefit guarantee,” which means they’ll guarantee to pay out a particular amount if you’re on reduced earnings at the time of filing a claim so you don’t suffer financial loss.
This guaranteed sum is often equal to your income at the time your policy was taken out or a minimum of £1,500 every month.
The suppliers who offer this benefit will have different terms and limitations. Not all service providers will provide this perk.
Daddy Insurance can compare income protection insurance quotes from our panel of insurance providers in the UK. Why not contact us for your free, no-obligation quotes?
What Illnesses are Covered by Self-Employed Income Protection Insurance in the UK?
Income protection insurance for the self-employed can cover any illness or injury that prevents you from working.
In 2021, leading provider LV= found that the most common reasons for claiming on an income protection insurance policy included[2]:
- Musculoskeletal injuries – 20% of claims
- Fractures – 20% of claims
- Cancer – 17% of claims
- Mental health issues – 15% of claims
- COVID-19 – 4% of claims
However, the following won’t be covered by income protection insurance:
- Unemployment
- Redundancy
- Illness/injury caused by drug or alcohol misuse
- Pre-existing illness/injury
- Illness/injury sustained while traveling to countries with epidemic outbreaks or countries the foreign office advises against
- Self-inflicted illness/injury
What you can (and cannot) claim for depends on how you define incapacity:
Own occupation – This will enable you to file a claim for any illness or accident that stops you from doing your regular job duties.
Suitable occupation/suited tasks – Allows you to make a claim for an illness or injury that prevents you from performing your current job or any job that is appropriate for your knowledge and skills. For instance, if you are unable to perform your current job, you may be asked to perform a different job that is related to your field of work. You may only assert a claim if you are incapable of making either)
Any occupation – You may file a claim if you are completely unable to work. For a claim to be successful under this criterion, absolute disability is frequently required. This can be an excellent alternative if you work in a high-risk profession where major injury is possible.
Why not get in touch with Daddy Insurance to fully understand your policy (and what you will be covered for)?
To make sure the insurance you select is the best fit for you, a helpful staff member may go over all the terms and conditions with you. Simply contact us.
What Insurance Should I Have if I am Self-Employed in the UK?
Along with income protection insurance in the UK, you might want to think about:
Life Insurance – Gives your loved ones a lump sum payment if you pass away during the policy’s term. This can either be given as an inheritance for your loved ones to use as they like or it can be used to assist in paying off the mortgage or burial expenses.
Critical Illness Cover – A tax-free cash lump amount is offered by critical illness insurance if you are given a serious but non-terminal diagnosis. Numerous ailments, including certain malignancies, heart attacks, and strokes are covered by this coverage. Through some carriers, it can be purchased separately or added to a life insurance policy at an additional cost.
Family Income Benefit – This type of life insurance pays out to your heirs and beneficiaries in monthly installments as opposed to a single amount. Your loved ones will be given monthly payments for the balance of the policy term after your passing. Ideal for preserving long-term family spending plans.
Compare Income Protection Quotes for Self-Employed Dads in the UK
For dads who are self-employed and do not receive typical sick pay benefits, income protection insurance can be a crucial source of financial help.
By obtaining income protection insurance, you may make sure that you can pay all of your monthly basic expenses on time without needing to rely on others, make lifestyle sacrifices, or go back to work before you’re ready.
Finding the best cost self-employed income protection insurance requires comparing quotes.
To help you get the best offer, Daddy Insurance can assist you in getting free quotes from our panel of insurance providers.
So, reach out to us right away to discuss your choices. Nothing stands to lose.
