Self Employed Critical Illness Cover
A tax-free and flexible way to cover lost earnings
Make sure you can cover your costs in the event of a serious illness or injury.
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A lump sum payment to keep you going during downtime
Facing a serious illness or injury that leaves you unable to work is challenging enough without the added stress of financial uncertainty. For self employed individuals, the impact can be even greater.
Self employed critical illness cover offers vital financial protection, providing a one-off lump sum payment if you’re diagnosed with a serious illness. This payment is designed to support your way of life, helping you cover essential costs like paying off debts, funding medical treatment or ensuring your family’s financial needs are met while you recover.
Finding the right policy is essential to protecting both your finances and your peace of mind. Our team of experts will guide you through the available options, tailoring the cover to suit your unique circumstances and lifestyle.
Note: All information about the tax treatment of products is based on current tax legislation and HMRC guidelines, which may be subject to change.
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What if your health prevented you from working?
How would you manage your expenses?
When you’re self employed, your income often supports a wide range of financial obligations, from mortgage payments and rent to groceries, utilities and more. If your ability to earn was suddenly taken away, could you cope without dipping into your savings or making sacrifices like downsizing? Critical illness cover offers a financial safety net, providing a lump sum payment to help you stay on top of your finances during a difficult time.
Could you afford the care you need?
The financial strain of illness or injury can be overwhelming, especially when your income is on hold. On top of everyday expenses, you may face unexpected medical costs. A payout could help you manage these bills, safeguard your family’s future and even fund home adaptations like ramps or specialised equipment to support your recovery.
What about your family?
If your loved ones depend on your earnings, the impact of illness can go beyond just you. The right insurance ensures that your family’s financial stability remains intact. The tax-free lump sum can be used to cover essential costs like household bills, childcare or education expenses, easing their burden as 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.