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How does Self Employed Income Protection Work?

Why take out Self Employed Income Protection?

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When you are self-employed you can enjoy a lot of freedom and autonomy but unfortunately you are also cut off from workplace benefits such as sick pay. Taking out a self-employed income protection insurance policy can give you back those workplace benefits without having to give up your self-employment, so you can enjoy the best of both worlds.

How does Self Employed Income Protection Work?

When you take out income protection you will have to provide evidence of your monthly income usually in the form of payslips. However, when you are self-employed this is not so straightforward. Typically, insurers require 1-3 years evidence of your annual and monthly income so they know an estimate wage to insure against. If you have only recently become self-employed and as of yet have no evidence of your average income then we are able to use certain insurance policies that require no proof of income, however the cost of your premiums may vary.

There is another option other than income protection insurance if you are self-employed called ASU or Accident Sickness and Unemployment cover. However, QQL do not offer these policies as we believe the claim to pay out rate to be too low.

Why take out Self Employed Income Protection?

Income protection is designed to cover you for a set amount of time, has no cash value sum assured, and is designed to cover your monthly wage after tax. Income Protection Insurance is designed in a way that means you will eventually return to work. If you require an insurance product to cover you in the event terminal illness or want a sum of money to be paid to your beneficiaries if you died, then life insurance and critical illness cover would be better options.

Income protection insurance is a great insurance product if you are self-employed to cover you in the event of temporary illness. We all have sick days, and we can’t predict future injuries, but government sick pay schemes or workplace sick pay schemes are in place to cover us in those scenarios. If you are self-employed, however, you may need to purchase your own cover. Remember, that self-employed income protection can be used in addition to statutory sick pay. Relying on SSP for a few weeks is often a great way to reduce your premiums by increasing your deferment period. Then you can switch to your income insurance to benefits from a fuller, healthier wage.

Self Employed Income Protection Benefits

For low monthly premiums you can get a number of benefits with self-employed income protection insurance, some of them are listed below but for a comprehensive list, give one of our advisors a call on our free phone number.

Continuous Cover

Perfect for contractors as work may not always be continuous but illness can strike at any time. Gaps between contracts can cause issues with some insurers but our insurers factor this in by including continuous cover for up to 3 months between contracts.

Fixed Benefit Option  

Prove & “Fix” your cover amount at the application stage. This ensures that a 75% proportion of a successful claim will be paid regardless of your income immediately prior to the claim.

Minimum Benefit Guarantee 

Fix your benefit (up to £1000 per month) in return for providing simplified financial evidence at the point of claim.

Replaces all of your after tax income

 As a self-employed individual, income protection will cover all of your monthly income after tax deductions so you won’t have to financially struggle whilst you are off work.

Dividends accepted

Some insurers do not accept these but we have insurers on our panel that appreciate as a self-employed person, your income can come in many forms and this includes income as dividends.

Flexible Claims Periods

Flexibility on cover terms to suit your specific needs & budget.  Choose a Limited Claims Period of 2 or 5 years if you want cover at a lower cost or a Long-Term Claim Period (included as standard with selected insurers from our panel), this will pay your benefit amount until a date chosen by you..

Day 1 Cover Available 

Instant cover is available from the first day you are unable to work (if you are off work 3+ days). Perfect for the self-employed or those who have no sick pay & their business is dependent on them being well to continue bringing income in. 

Deferment Periods 

You are able to defer your insurance payments from 1 week to 1 year.   If you are lucky enough to have money put away for a 'rainy day' & could manage your bills if you were taken ill for a month for example, flexible waiting periods can help to bring your premium down the longer the period is that you could manage.  

Give Quick Quote Life a call

When you give Quick Quote a call we will be able to compare all the insurers for you after you tell us exactly what it is you need. It is often quicker and easier than comparing companies yourself online. In addition, our advisors deal with thousands of requests and so their knowledge on which insurer has the best deals for the most comprehensive cover are usually unrivalled by any comparison website.

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