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As a self-employed person, I don’t necessarily enjoy the same benefits as those who are employees. There is no sick pay and there is no maternity pay unlike a job with a company where you may be entitled to at least statutory amounts. I chose to be self-employed, yes, after being made redundant from my previous job but that also means it could put me in a financially precarious position.
I am also the breadwinner in the family – Steve is currently studying full time before looking for a new job in that field in the new year – so I cannot afford to lose any money at all – something which has been quite difficult to deal with during the events of this year! That is why income protection is a must for me – I need some cover and some reassurance that should I get ill, my bills and everything are covered. I have a family to support.
But what is income protection?
If you’re sick or injured, income protection will enable you to pay your bills and provide for you and your loved ones. Where state benefits can and do change inline with government policy, this cover is a contract and a promise to you that won’t change.
Income protection is available for everyone so those who aren’t covered by their company can utilise it as can self-employed people!
According to the ABI (Association of British Insurers) one million workers a year find themselves unable to work due to a serious injury or illness. It is there to pay out in case something happens to you and you cannot work.
Photo by Annie Spratt on Unsplash
It will usually provide between 50% and 70% of your salary until 1 of 3 things happen; you recover and go back to work, you reach state pension age and retire, or you pass away during the period of the claim.
Income Protection is available to self-employed, primary carers, part-time workers, contractors and more.
Why it is important to me?
Simply put – I am not covered for sick pay, maternity or even a pension. I need a safety net should I be unable to work for an extended period of time. I can take the odd day off here and there – my clients are ever so understanding about this as everyone gets ill sometimes. However I wouldn’t be able to keep holding my clients off if I was sick for a lot longer so would lose them – and that’s completely understandable – so I would need some sort of financial back up plan and that is where income protection comes in!
I rely on my clients and ad-hoc work to keep me afloat – my clients cover my bills and then any ad-hoc work (whether it is on the blog or freelance writing for one off clients) is an added extra. To lose my clients through no fault of my own or their own would mean I would take a financial hit and I just cannot have that. I’d much rather pay a little towards income protection to ensure I’m covered even if nothing ever happens rather than not be covered and something actually happen!
I need some reassurance that my family are covered in any eventuality and income protection is the answer.
Do you have income protection?
Sounds very useful to those who need it.
Always wise to have a back up plan is my opinion
Self Employment :- I somehow have the impression / belief that this has increased over a number of decades. Though I would like to know for sure.
Seems to me that children should be informed and educated in regards to Employment, Self – Employment whilst at school. In preparation for Adulthood.
We all have needs :- quality of life, nutrition, environment, etc all have an impact on us as individuals, families, communities, society, etc.
We learn by experience, our own and others sharing their experiences. Income Protection sounds practical and sensible. Yet like everything that entails a financial payment / commitment it is essential to ascertain reality of the service / policy if / when a claim is made / required.
Will pass this information onto me friend who
Is self employed
Very wise. This is a subject that all late teens should be taught as part of a wider financial management education module.
That certainly sounds sensible to me, I must check that my daughter has this in place
I used to have a form of it where I used to work a good 10 years ago. I don’t have it now. It does help provide peace of mind.
When I. bought my house, the first thing I did was get income protection as well as mortgage protection for the just-in-case times.
this is great to know and I shall share this with others too
This was a very interesting post to read.
This was very interesting and honestly something I hadn’t looked into at all. Will definitely do so now
I can see why income protection is a must if you are self employed. I have a few friends who are self employed and rarely take time off because they can’t afford to and really struggle when unwell. Think advice about self employment should be taught to youngsters when looking at careers.
I’d not heard of income protection before reading this post. If my dream of giving up the day job and just freelancing comes true I’ll look into it.
It is such a good idea to have income protection if you are self employed. My husband had it when he worked for Wren as their benefits were awful
My husband has always been in charge of all our insurances. It is so important to protect your income should you need it.