Critical Illness Insurance for Self Employed People
Flexible and tax-efficient protection for life’s uncertainties
Protect yourself against the financial challenges of a serious illness or injury.
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Stay financially secure during serious illness with a lump sum payment
A serious illness can disrupt your income, and for self employed individuals, the consequences can be even more significant. Critical illness insurance provides crucial financial support when you need it most.
With a one-off lump sum payment, this cover helps you handle essential costs, such as repaying debts, covering medical treatment or keeping your family financially stable during recovery. It’s designed to ensure that your focus remains on getting better, not on how to pay the bills.
Our experienced team can help you find a policy that matches your needs, lifestyle and financial situation, giving you the peace of mind to navigate any medical challenges ahead.
Note: All tax-related information is based on our understanding of current legislation and HMRC guidelines, which may be subject to change.
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What happens if you’re unable to work?
How will you cover your expenses?
When you’re self employed, your income often supports critical expenses like your mortgage, rent, utilities and groceries. Without that income, meeting these obligations can become a challenge. Critical illness insurance provides a financial safety net with a tax-free lump sum to help you manage your finances during recovery.
Can you afford the care you need?
Illness or injury doesn’t just reduce your income—it can also increase costs. Private treatments, ongoing medical expenses or even modifications to your home may be necessary. With the right insurance, you can cover these unexpected expenses, easing the pressure on you and your family.
What about your family?
If your loved ones depend on your income, the ripple effects of illness can be felt throughout your household. The lump sum provided by your policy ensures their needs are met, from household bills to childcare and education expenses, reducing their financial worries while you recover.
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FAQs
How does it work?
If you are diagnosed with a serious illness, a Critical Illness policy will pay out a tax-free, one-off payment (some insurers may offer monthly instalment options also). This can help you pay for your mortgage or rent, and any existing debts you may have or help you to make adjustments to your home, such as a wheelchair ramp if you need it.
What illnesses are covered?
Each insurer has its own list of critical illnesses that they cover. Typically, you’ll be insured for heart attacks, cancer (depending on the type and the stage), strokes and permanent disabilities due to an illness or injury. If you have a specific illness that you want to be covered for, get in touch with a Broadbench adviser who will be able to guide you to the right insurer.
What factors impact the policy’s cost?
There are a number of factors that can influence the cost of your monthly premium including:
- Your age
- The level of cover you wish to take out
- Whether you’re a smoker or have previously smoked
- Your current health, weight and family’s medical history
- Your job (some occupations carry higher levels of risk than other professions and therefore may increase the monthly premiums)
What are the benefits of Critical Illness Cover?
Firstly, to keep a roof over your family’s head. With Critical Illness Cover, you can rest assured that you will be able to keep up with mortgage repayments or even pay off the full remaining amount. You’ll receive a tax-free pay-out – If you are diagnosed with a Critical Illness, the money you and your family receive is tax-free. Lastly, it gives you peace of mind – No one knows what the future has in store but with Critical Illness Cover, you will be protected for a number of illnesses. This way you can rest assured that you and your family are financially secure.
You may be able to get small multiple payouts. Most policies will only pay out once, but some insurers will make a small payment if you are diagnosed with a less severe illness. In this case, your policy would continue, and you should be able to make a further claim down the line if you’re diagnosed with a more critical illness.
How is Critical Illness different from Income Protection?
To claim on a Critical Illness policy, you must be diagnosed with a medical condition that meets one of the definitions on the policy. In contrast, to make a claim on an Income Protection policy simply relies upon you being unfit for work, no specific medical condition is needed – therefore the pay-out is to cover you until you’re fit to return to work.
Who do I notify in the event that a policyholder passes away?
You should notify the claims department of your insurer, you will find this contact info on the policy documents or their website.
Why do contractors need Critical Illness?
When you work for yourself, you no longer receive the same benefits as regular employees. These benefits include payment to cover a long period off work due to sickness. The alternative to receiving ‘sick pay’ is to receive state benefits, however, this may not be enough to replace your income.
If you’re eligible, you may be able to receive Employment and Support Allowance (ESA) – which ranges from £70 to just over £100 a week, depending on your circumstances and the seriousness of your illness or disability. Will that be enough to cover your household bills and family’s lifestyle? If not, then you should consider Critical Illness cover.