Picking The Right Insurance When You’re Self-Employed

Recent statistics show that about 15% of the UK's working population is self-employed. People love self-employment for its freedom and flexible working hours.

The feeling of being in control, ability to work from anywhere (in the case of working online), and being able to choose who to work with are all huge motivators for going into self-employment.

But even with all these perks, there’s one thing you can’t control; what the future holds. Have you thought of what would happen if you ever got injured or so sick that you can no longer work? How about the possibility of one of your team members or clients getting hurt in your business?

All these are possibilities and they should be enough to convince you to take out life insurance to protect yourself, your family, and your business. But how do you pick the right cover when you’re self-employed?

Don’t worry as we’re here to help. This post goes into detail into some of the best life insurance products for the self-employed. But first…

Why take life insurance as a self-employed worker?

Let’s face it; while working under a boss may not give you the level of freedom and control you’d like, it comes with its fair share of benefits. For example, some organisations offer death-in-service benefits, where your loved ones receive a lump sum payout if you pass away while still employed. Most employers also provide sick pay, maternity leave, and employer-provided insurance.

When you’re self-employed, you will be responsible for providing such benefits by yourself. That can demand you financially especially if you’re the sole breadwinner for your family.

But that’s not a worry if you take out life insurance for the self-employed. This cover provides financial protection and a safety net for your dependents should you pass away.

What types of life insurance should you consider?

You just took your first step or plan to venture into sole proprietorship, consulting, freelancing, or contracting. Congratulations on the significant milestone!

Now it’s time to discuss how to protect yourself, your loved ones, and your venture. Below are a few life policies you might want to consider.

Income protection insurance

This policy offers financial assistance to you and your loved ones if you were to fall ill and are unable to work. Income protection covers a part of your monthly earnings, usually 50-70% depending on your provider. Your family can use the payout to cover bills and daily living expenses while you recover.

Level term life insurance

By taking out this policy, you’re securing your loved ones’ financial future as it promises to offer a lump sum payout should you pass away within the contract period.

Critical illness cover

This policy pays out a tax-free lump sum payout if you ever get diagnosed with a critical condition. You’ll find it prudent to take out this type of cover, because it can cover the full cost of longer term medical care plus a buffer against the financial losses that your finances might take through your inability to work. Your family can use this financial support to afford bills and daily expenses during your treatment and recovery. Should you run into any difficultly when it comes to making your claim, you could always get some advice on trauma insurance claims from Curo Financial Services and see if there is anything you could do to build a stronger claim that is more likely to be accepted.

Over 50s life insurance

If you’re aged between 50 and 80 years, it can be challenging to get the standard life insurance policies. Thankfully, the over 50s life insurance is here to keep your dependents financially protected when you depart. And the best part? You can get coverage regardless of the state of your health or lifestyle.

Decreasing term life insurance.

Do you have outstanding mortgage payments or other long-term financial obligations that you think may take a toll on your family’s finances if you were to pass away before clearing them? Decreasing term life insurance can help. This policy is designed to specifically cover the gradual debt repayment. Should you pass away within the contract period, your insurer pays out a lump sum amount that your dependents can use to clear the debt.

Conclusion

The fact that you’re self-employed doesn’t mean there aren’t suitable policies for you and your loved ones. When choosing a plan, it’s important to take into consideration individual circumstances and needs. For instance, if your family would struggle financially should you fall ill and are unable to work, income protection cover would help to provide a continuous income flow during such hard times. Likewise, if you have long-term financial obligations, you may consider decreasing term life insurance to protect your family.

Do you have any questions regarding life insurance for the self-employed? Feel free to ask in the comments below!