Self Employed Life Insurance – An Insurance for the self-employed

Self Employed Life Insurance - An Insurance for the self-employed

Self Employed Life Insurance - An Insurance for the self-employed

People who love to be their own boss, understands the perks of becoming self-employed. But, if you don’t have a life insurance, the financial future of your family will be somewhat dark. So, for the self-employed, a life insurance policy is important. It will protect your loved ones if you die suddenly.

Being your own boss, gives you a plenty of freedom. But, it also means that you have to take on new responsibilities. At the same time, you may lose some benefits you took for granted. Because, there is no death-in-service benefit for self-employed people, they should consider getting a life insurance. That could reduce the impact of having no parental leave, paid holidays and Statutory Sick Pay.

Do not worry about those minus points of getting self-employed. Taking on a life insurance can assure you a peace of mind. With that, the future of your dependents will be not insecure.

Life insurance and personal insurance – Spot the difference

Life insurance is insurance policies that could pay a cash sum if you die or get a terminal illness (have a life expectancy of less than 12 months) during the agreement period.

Personal insurance is an umbrella term which refers to any insurance policy you take as an individual. Then, an example of personal insurance, is life insurance. There is no separate insurance in the name of ‘personal insurance’ for self-employed workers. But, there are other various types of insurance which fall under that category.

Life insurance is not only for permanent employees with a full-time salary. Significantly, it will be more important to get a life insurance if you are self-employed. It is because there are other benefits you won’t receive as a self-employee. The permanent employees will receive many of them as a workplace benefit.

Insurance for the self-employed – What types are available?

Before you start freelancing, contractor work or consulting you have some things to consider. There are various types of insurance for the self-employed. You may have to select out of them.

Life insurance (for self-employed)

When you are an employee, you receive some protection from your employer, like a death-in-service benefit. But, if you are self-employed, you will not receive this benefit. So, considering to take a insurance is better. Normally, life insurance and decreasing life insurance can pay a repayment if you die, or catch a terminal illness( having a life expectancy of less than 12 months) during the period of the policy. Also, remember that life insurance appears to be cheaper when you are young. That is because an employer’s death-in-service policy will be only valid in the duration of your employment. You can take a life insurance, whether you are self-employed or not. Don’t know how a life insurance works ?Click here to learn how.

Critical Illness Cover

Head over here to see what a critical illness cover looks like. When you take a life insurance or a decreasing life insurance, you can add this. If you work on your own, this cover will be a good option to consider. You get a cash sum, if you fulfill the following requirement. That is, you have to get diagnosed or undergo treatments for any of the specified critical illnesses. There is a list of critical illnesses given by your insurer. Also, you have to survive 14 days starting from the day of diagnosis.

Income Protection Benefit

When you are self-employed, you will not benefit of sick pay. Think of yourself getting a long-term illness or injury. What will happen if you are unable to work then? You will definitely lose your earnings.

The good news is, an income protection benefit will come to your help. You will receive a regular monthly payment, if you can’t work due to an illness or injury. You will receive that money, until you retune to work, die or retire. (whichever happens first. )

The need of a life insurance for the self-employed

Life insurance is a very valuable type of personal insurance. A life insurance is extremely valuable for the self-employed. If you are a self-employer, you enjoy a lot of benefits. You can choose the time you need a holiday. And, you can work on various projects. Also, you can deduct allowable expenses from your running costs. At the same time, you don’t receive the following. A permanent employee will receive them.

  • Paid holiday
  • Sick Pay
  • Maternity, paternity, adoption pay
  • Paid time for emergencies
  • Redundancy Pay
  • National Minimum wage
  • Paid compassionate leave

Life insurance will not cover all of these benefits. But, the payment you receive at the death or a terminal illness is great. It could be a great help for your dearest and nearest. Moreover, most employers have good company pension plans. Also, they have ‘death-in-service benefit’. So, your dearly ones will receive more than your salary, if you die while in job. As a self-employed person, you will not receive that benefit. Therefore, it is good if you apply for a life insurance.

To be your own boss will feel attractive. But, without personal insurance as life insurance, your nearest ones will feel insecure. Imagine you don’t have life insurance and critical illness cover. Then, your sudden death, or critical illness will affect them badly. Life insurance can give you added security in the following way. Your family and dependents can receive money from your life insurance, at that times. Also, remember these are not investment products or savings. They do not have cash value unless you make a valid claim.

Self-employed ? Take on an life insurance

Normally, most life insurance policies work in the same way for all. This is regardless you are self-employed or an employee. If you die during the term of the policy, it can reduce the bad impacts. Especially on your loved ones. Though the worst things happened, it will assure your family is protected. Some insurance agencies offer a decreasing life insurance policy. The amount of cover reduces approximately in line to the decrease in repayment mortgage. So, a decreasing life insurance policy helps to protect repayment mortgage.


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