Choose Income Protection
How great is the freedom you get from being self-employed or running your own business? Nobody looking over your shoulder, the flexibility to keep your own hours, more time to spend with family… the list goes on.
However, aside from a predictable monthly salary, there is one big benefit that the self-employed miss out on – sick pay.
Despite the autonomy your work provides, the fact remains that when you’re not working, you’re not earning.
In 2022, the average number of sick days taken per worker in the United Kingdom was 5.7. Depending on your day rate, that could work out to thousands of pounds in lost earnings if you were to do the same.
A sick day here or there won’t break the bank or derail your business, of course, but a serious injury or long-term illness could.
Consider how your family and your company would cope if you were forced to take an extended absence from work. A few months or maybe more. With no money coming in, would your savings cover your costs? What if there were medical bills to pay on top of regular expenses like mortgages, groceries or school fees?
Serious illness or injury could mean you suffer from:
- Lost income from being unable to work.
- Depletion of personal finances while covering lost earnings.
- Impact on day-to-day business operations.
- Damage to client relationships or your company’s reputation.
- Increased expenses due to medical bills and rehabilitation costs.
A safety net for the self-employed
Put simply, being unable to work puts you, your business, and any savings you have at risk unless you invest in a safety net. For business owners and the self-employed, that comes in the form of Income Protection Insurance. As the name implies, it protects you from missing out on essential income during periods when you’re unable to work because of illness or injury. This is normally a consistent payment of anywhere between 50 and 70% of your income until you are well enough to return to work, retire, or the policy runs out.
Policies vary, with different payment amounts and waiting periods, so it’s important to understand what you’re paying for. However, unlike Critical Illness Cover – which pays a lump sum on diagnosis of a specific qualifying illness – Income Protection Insurance benefits are triggered by your inability to work due to most illnesses or injuries. Many providers also include support services like rehabilitation assistance or counselling to help you get back on your feet faster.
With all of these benefits available, it’s hard to see why those most vulnerable to the impact of illness or injury wouldn’t opt for such a policy. However, according to LV, only 6% of self-employed workers have purchased an income protection product, and 60% would choose to use their savings to pay the bills if they were unable to work. 17% would continue to work through illness or injury.
While ploughing on bravely in the face of a medical setback might be seen as one of the costs of self-employment or some sort of business owner’s badge of honour, it’s important to consider your long-term health. Pushing yourself too hard could lead to more issues down the line, resulting in longer periods off work or worse. Meanwhile, using savings to make up for an income shortfall will impact your overall financial plan and limit your options for the future.
You might think, ‘It won’t happen to me’, but why take the risk?
By talking to one of Broadbench’s experienced insurance advisors, you can tailor a plan to suit your specific needs and find a policy that fits your budget. For a few minutes of your time and a small monthly cost, you can rid yourself of the worries and focus on what’s important: your family, your business, and your health.
Don’t miss out on your income when you need it the most.
Speak with one of our expert advisors and find your ideal Income Protection policy today.Speak to an expert