Why We Opted For Income Protection Insurance For Self-Employed
*This is a collaborative post but all thoughts and experiences with income protection insurance for self-employed are my own
At the tail end of 2019, we began the process of buying our first house. For us, the whole process was pretty smooth and we were lucky to get our keys just before lockdown. During the process of applying for our mortgage, we were offered income protection for self-employed people like Luke (and general income protection).
We hadn’t thought too much about income protection insurance for self-employed. But for us, it was a no-brainer to get it.
What is income protection insurance?
Each year one million people in the UK become unable to work due to serious illness/ injury which is a crazy figure. If you’re employed then chances are your place of work has a scheme if you’re off but it differs a lot from company to company. You may only accrue sickness pay after a certain length of service. Or you may only have a small allocation of paid sickness which doesn’t help for a long-term illness. But if you’re self-employed you don’t even have that to fall back on. This is why income protection insurance for self-employed finances was so important for us.
If you’re unable to work you’ll still need to pay your mortgage/ rent, bills and for food. So if you’re left without pay, or on a lower than usual wage it can be really tough to cope. This is where income protection comes in. The insurance will pay out to help provide for you and loved ones.
There are lots of different types of income protection and the more you pay monthly for your insurance the more benefit you’d get. We picked one which can be claimed on if you’re off work for longer than 4 weeks. For us, we could cope for a month without Luke’s wages. But longer than that we’d suffer. The insurance gives us a set sum each week/ month that Luke may be out of work (although hopefully, we’ll never need it).
Whether you’re a part-time worker, a contractor or self-employed you can get income protection insurance.
Why we chose to get the insurance
Me and Luke earn pretty much the same amount of money so halving our monthly income would be quite drastic for us. Especially if he wasn’t earning for a longer period of time. This could affect us being able to pay our mortgage and it’s one stress we didn’t want in our lives.
Knowing that we have peace of mind if anything does happen is invaluable for us. This is why we chose a policy built around our circumstances to ensure we weren’t overpaying monthly premiums. You can choose to cover as much of your income as you’d like. Or you can opt for just a figure which would cover your mortgage or rent payments.
Do you have income protection insurance?
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14 responses to “Why We Opted For Income Protection Insurance For Self-Employed”
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Rhian Westbury
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Although we all moan about paying for insurance to me it is always something to have for the just in case times. No one would have known what we are going through now, it also takes away a lot of the stress and worry
This is really interesting and something I hadn’t considered to be honest. I’m self employed though, so I will now spend some time looking into insurance, thank you 🙂
It’s one of those things that you hope you’ll never need, but it’s worth having just in case x
This is such a great idea. I will discuss this with my spouse and make further enquiries on the necessary steps to take.
I don’t have it but it is something I have thought about getting but hadn’t yet got round to! I definitely need to get some.
I wonder how many people haven’t thought about having this, the only reason I’ve heard of it, is because one of my closest friends has it and for C19 it’s literally been her saviour x
I have income protection insurance too – I’m not self employed but I do live on my own. So if I was to lose my job, I’d really struggle to pay the mortgage if I was out of work for a long amount of time. It’s also nice to have the protection if you need it x
That’s exactly the kind of reason it’s good. When I lived on my own I had no idea about it and never thought about how useful it could have been x
I’ve got critical illness insurance Also I work full time but if my side hussle ever takes off and go self employed I’d extend my insurance.
I have been self employed for over 4 years now and I had no idea that there was such an insurance, that protects the income. I will definitely take a look into it. I wish I did know before though, as working in tourism, my income has been drastically affected by this virus.
Not many people realise the importance of having an insurance that helps protects your income. When something inforseen does happen, this somehow becomes a lifesaver.
You’re so right, it’s important for those times no one can predict, like now x
This is a good move for sure. It is deffo needed especially when anything can happen at anytime which can impact your income x
This is something I need to look into. As a work from home professional, my income has been affected because of the pandemic. Clients have reduced the workload they send me every week. Income protection insurance is a great way to deal with losses and help us get back on our feet.