Related Articles

David Thompson is chief executive of dg mutual, which provides income protection insurance to self-employed professionals. dg mutual is one of only 9 mutual societies that offer income protection in the UK; it has no shareholders but instead pays out all its profits to the members.
Becoming self-employed is a big step to take, but it can provide many benefits such as freedom, intellectual fulfilment and flexibility. There are also financial benefits as some self-employed people earn more than they would as an employee. However, there are also higher risks and disadvantages if you are not prepared…
Recent research reveals that over five million households are not saving enough money, leaving them exposed when faced with unexpected expenditure. If a self-employed person becomes ill or suffers an injury, there is often a gap in their finances as there is no company sick pay.
It can be tough starting out on your own, but having the right financial security in place at the start can help to overcome stumbling blocks in the future.
When looking at insurance policies to protect your business, you probably have ensured your premises and customers are protected. But one thing many self-employed workers forget to insure is their own income. Help is thankfully at hand through an insurance policy called income protection.
Income protection insurance provides a regular tax free income if you are unable to work because of illness or accident. The benefit paid is usually up to a maximum 60 percent of your earnings.
It’s not always a “serious illness” that leaves you unable to work. Even a case of the flu can damage your ability to work. Income protection covers a wide range of illnesses including the flu, infections, accidents, stress and muscoskeletal disorders. It also covers a wide range of occupations, so check each provider to see what occupations they cover.
Premiums depend on your job, gender and income. For example, a 30 year old self-employed professional earning £30,000 a year would pay around £37.00 a month and receive a monthly income of £1,650 immediately if an illness/injury struck. To help you decide on a plan that’s right for you, assess your finances to find out how much you would need if you were off work.
There are many benefits of having income protection in place:
Many people couldn’t survive on what the state provides as it’s currently a maximum of up to £105.05 per week. Income protection insurance is perfect to fill this gap.
Finding the right provider doesn’t have to be tough. Here are simple things to look out for:
When you are self-employed you often find yourself with little time to spare. However, a quick search online could help to speed up the decision making process. Have a look at independent websites such as Which? as they offer advice to help you make an informed decision. Also visit providers’ websites to get a feel for their company and their service.
Once you have researched providers and put a plan in place, remember to continually evaluate your policy to make sure it fits in with your lifestyle.
Income protection provides a financial safety net if the worst was to happen. So make sure you find a plan that suits your current circumstances and earnings. After all, you don’t want any financial stumbling blocks to stand in the way of your success.
Mon-Fri 9am-5.30pm