Income protection insurance if you are self-employed could be crucial. If you and your family rely on your earnings, income protection insurance covers you with tax-free monthly payments if you became unable to work. This could be either as a result or injury or illness. Income protection insurance differs to critical illness insurance which would cover a serious illness causing long-term absence or the ceasing of work altogether.
Income protection insurance if you are self-employed could be crucial. If you and your family rely on your earnings, income protection insurance covers you with tax-free monthly payments if you became unable to work. This could be either as a result or injury or illness. Income protection insurance differs to critical illness insurance which would cover a serious illness causing long-term absence or the ceasing of work altogether.
Income protection insurance is intended for situations where an illness or an injury inhibits a self-employed individual from completing work and therefore having no earnings coming in. If you have other savings, or could borrow money from friends or family, then you may not need this type of insurance. However, most self-employed individuals would need a source of income whilst they were unable to work whether it was on a short or long-term basis. An income protection plan for self-employed business owners could be what helps keep your business afloat and your bills paid during this time of absence.
There are various types of insurance policies that offer income protection plans for self-employed individuals and they vary based on the likely length of the self-employed individual’s absence. The two main types of income protection are short-term and long-term policies. Short-term policies would be for a set period of time and would assume your absence from work is only temporary. Short term income protection policies can be claimed against more than once. Logically, the longer-term policies would protect your income less definitively and could continue until retirement.
The cost of protecting your income will vary depending on the type of policy that you select, the percentage of your gross income you agree to cover, and your personal circumstances. As with any health-related insurance policy, your income protection insurance premium will be dependent on your age, weight, general health, lifestyle choices (smoking/drinking etc) and the nature of your work. Self-employed business owners are often tradespeople whose jobs can often be more dangerous so this can be reflected in the premium for your income protection plan.
Finding an income protection plan can be tricky to navigate in trying to figure out how much cover you need as well as which type of cover you will need. Active Mortgages has a team of income protection insurance specialists who work daily with self-employed clients who want to protect their incomes if they became unable to work. By using one of Active Mortgages’ experienced income protection insurance advisers, who specialise in the self-employed, you can feel confident that you are getting the right advice.
Active Mortgages will take time to listen to your personal circumstances and how much you can afford to pay as well as the length of income protection plan that is required. You can focus on running your business and enjoying the perks of being self-employed.
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