Self Employed Sick Pay: Income Protection

Protecting Self-Employed Professionals with Income Protection

Imagine you’re a self-employed tradesman finishing a job. In a rush, you misplace a ladder, fall, and injure your back, leaving you unable to work for 3-6 months. Without sick pay, how do you cover expenses? Income protection, or self-employed sick pay, can start paying from day one or after a deferred period (1 week to 6 months), tailored to your savings and needs. A longer deferred period lowers premiums, balancing cost and coverage.

Case Study: Freelance Graphic Designer

A freelance graphic designer from Brighton contacted True Advice to secure financial stability in case of illness or injury. Without employer sick pay, she faced potential financial jeopardy. We arranged a tailored income protection policy based on her earnings. When she later fell ill, the policy paid out promptly, covering living costs and enabling a stress-free recovery.

Case Study: Self-Employed Construction Consultant

A self-employed construction consultant in Sussex approached us after a minor accident sidelined him for six months. With significant expenses and no sick pay, he needed reliable protection. True Advice arranged a bespoke income protection plan:

• Monthly benefit at 60% of average pre-tax earnings, covering essentials and business overheads.
• Waiting period aligned with cash flow needs to avoid delays.
• Annual reviews to adjust cover as his income and client base changed.

When a recurring shoulder injury required extended recovery, the policy provided tax-free monthly benefits, allowing him to focus on rehabilitation, maintain his business credit rating, and return to work without financial disruption.

Employed vs. Self-Employed: Understanding Sick Pay

Unlike employees with statutory sick pay, self-employed individuals have no fallback. Even employees should review their contracts, as employer sick pay varies in amount and duration. Income protection bridges these gaps, ensuring financial stability for both employed and self-employed individuals during recovery.

Why Income Protection Stands Out

Other insurance types, like critical illness or life insurance, don’t cover non-critical injuries or illnesses (e.g., a slipped disc or broken leg). Income protection is designed for living, providing ongoing support until you recover, unlike policies that only pay out on death or severe diagnoses.

Cost of Self-Employed Sick Pay

Premiums depend on age, occupation, smoking status, desired coverage, deferred period, covered conditions, and health. We assess your financial situation through a fact-finding process, sourcing the best prices from our whole-of-market panel for comprehensive coverage.

Additional Insurance Options

Beyond income protection, consider family income benefit, life insurance for mortgage protection, buildings and contents insurance, or key person cover for businesses. Our advice is free, with no cost for assessments or applications.

Free, Expert Advice

Our income protection advice is completely free. We encourage you to explore your options with us to ensure you’re fully protected. Contact us via our enquiry form to discuss your needs. We also offer advice on pensions, investments, and mortgages.

Frequently Asked Questions

What is self-employed sick cover (income protection)?

It provides monthly tax-free payments, typically up to 60% of your earnings, if you’re unable to work due to illness or injury. Unlike employed workers, self-employed individuals don’t qualify for statutory sick pay.

Can I get cover if I’m self-employed?

Yes, True Advice specializes in income protection for self-employed professionals across various trades, including those with fluctuating or seasonal income.

How quickly will I receive benefit payments if I claim?

Payments begin after the agreed waiting period (4, 8, 13, 26, or 52 weeks) and continue monthly until recovery or policy end. We tailor this to your budget and needs.

Are claims dependent on the type of illness or injury?

Most illnesses and injuries are covered, including musculoskeletal issues or respiratory conditions, though coverage varies by policy.

How is the monthly payout calculated for self-employed clients?

It’s based on average taxable earnings over a defined period (e.g., last 12 months), using tax returns, invoices, or business statements for accuracy.

Can the policy be reviewed and adjusted over time?

Yes, we offer annual reviews to adjust coverage as your earnings or circumstances change, ensuring ongoing relevance.