Self-Employed Protection
Safeguarding your income and family when there's no employer safety net
Who this is for
- You're a sole trader, freelancer, or contractor with no employer sick pay
- Your family depends on your income and you have no safety net if you can't work
- You want to protect your business continuity if you're ill or injured
- You're concerned about how you'd pay bills and overheads if income stopped
- You don't have access to group life insurance or income protection through work
What this cover helps with
Self-employed protection is about replacing your income if you can't work, and ensuring your family is financially secure if you die. Without employer benefits, this type of cover is often more critical than for employees.
Key outcomes:
- Your income is replaced if you're too ill or injured to work
- Business overheads and personal bills continue to be paid
- Your family has financial security if you die unexpectedly
- You avoid dipping into savings or closing your business during illness
- Peace of mind that you're covered as comprehensively as an employee would be
Common cover types and options
Income Protection
Pays up to 60% of your income if you can't work due to illness or injury. Typically the most important cover for self-employed individuals. Payments continue until you return to work, retire, or the policy ends.
Life Insurance
Pays a lump sum on death to clear debts and support your family. Can be level or decreasing term. Essential if you have dependants or business debts.
Critical Illness Cover
Pays a lump sum if you're diagnosed with a serious illness. Can help cover lost income, treatment costs, or business debts during recovery.
Short vs Long Deferred Periods
The deferred period is how long you wait before payments start. Shorter periods (4 weeks) cost more but provide faster support. Longer periods (13 or 26 weeks) are cheaper if you have savings to cover short-term gaps.
Own Occupation vs Any Occupation
'Own occupation' pays out if you can't do your specific job. 'Any occupation' only pays if you can't do any job suited to your skills. Own occupation offers better protection but costs more.
Business Overheads Insurance
Covers fixed business costs (rent, utilities, staff) if you're unable to work. Separate from income protection, but useful if you have significant overheads.
Pros and considerations
Benefits
- Income protection replaces lost earnings, not just covering death scenarios
- Own occupation cover protects your specific profession or trade
- Premiums are typically tax-deductible as a business expense (check with your accountant)
- Flexibility to choose deferred periods and benefit levels to suit your budget
- Cover can continue until retirement, providing long-term security
- You're not reliant on state benefits, which are minimal and means-tested
Considerations
- Income protection premiums can be higher for older applicants or risky occupations
- Proving income can be more complex for self-employed, requiring accounts or tax returns
- Pre-existing conditions may be excluded or result in higher premiums
- Deferred periods mean you'll need savings or support for the initial weeks
- Any occupation definitions are less generous than own occupation
- Balancing comprehensive cover with affordability requires careful planning
What affects cost and acceptance
Several factors influence both the price of your cover and whether insurers will accept your application:
Insurers and options
I compare leading UK insurers that specialise in self-employed and contractor income protection. Underwriting and definitions vary significantly, so it's important to choose an insurer whose terms suit your occupation and circumstances.
Important: Availability and suitability vary based on your individual circumstances, health, and requirements. I'll recommend what fits you best after understanding your specific situation.
Frequently asked questions
How much income protection do I need as a self-employed person?
Most policies allow you to insure up to 50-60% of your net profit. You'll need recent accounts or tax returns to prove your income. I'll help you work out a realistic and affordable benefit level.
What's the difference between own occupation and any occupation cover?
Own occupation pays out if you can't do your specific job (e.g., as a plumber or graphic designer). Any occupation only pays if you can't do any work suited to your skills and experience. Own occupation is more protective but costs more.
How long should my deferred period be?
It depends on your savings buffer. If you can manage 3-6 months without income, a longer deferred period (13 or 26 weeks) will reduce premiums. If you need support sooner, a 4 or 8-week period is better but more expensive.
Can I claim income protection premiums as a business expense?
Usually yes, if the policy is taken out for business purposes. This can make the cover more affordable. However, benefits may then be taxable. Check with your accountant for your specific situation.
What if my income fluctuates year to year?
Income protection is typically based on your average earnings over recent years. Some policies allow you to increase cover if your income grows, or you can review and replace the policy as circumstances change.
Do I still need life insurance if I have income protection?
Yes. Income protection covers you while you're alive but unable to work. Life insurance provides a lump sum for your family if you die. Both address different risks, and most self-employed people benefit from having both.
What happens if I have a pre-existing condition?
Insurers may exclude that condition, add a premium loading, or in some cases decline cover. Being honest at application is essential. Some insurers are more flexible than others, which is where broker advice helps.
Can I get cover if I work in a high-risk occupation?
Yes, though premiums may be higher and some insurers specialise in certain trades. Manual occupations, construction, and hazardous work can be covered, but it's important to disclose your exact job role accurately.
Let's make sure you're covered properly
I'll search the whole market, explain your options in plain English, and help you make an informed decision. No pressure, no jargon.
Please note: The information on this page is for general guidance only and does not constitute personal advice. Your individual circumstances, health, and requirements will determine what cover is suitable and available to you.
The Right Broker Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. (FCA number 715860).