Income Protection for the Self employed

kiwiscot_2

Hi Forum.

I'm new on here but even after reading Martin's explanations on MPPI / ASU and referring to his recommended sites I'm still in a bit of confusion - can anyone help?

With a recently bought flat (June 2006) and being self employed (from July 2006) I'm not sure which kind of policy I should take on board in case of, mainly, unemployment. Should I even look at MPPI / ASU or would I be much better taking an Income Payment Protection Insurance, which I could then use to pay off different items each month, including covering the mortgage?

I think the IPPI is the better way to go, unless anyone has any other suggestions, such as just saving a lump sum in a high interest bank account each month to cover eventualities?

I also have a personal pension and am a member of the British Benefits Society, which helps if I'm off sick - if that makes a difference too?

Hope that makes sense?

Cheers

kiwiscot

dunstonh

Self employed individuals are usually better off considering real income protection plans and not mortgage related ones. Switch your research to permanent health insurance.

kiwiscot_2

Thanks for that, but surely permanent health insurance only covers you if you fall ill?
What if I lose my job without falling ill? I'm know i'm self employed but work can dry up very fast in my line of business - A few years before I bought the flat I had no work for nearly 8 months and so had to change career completely for a while....
From the way I read the web sites IPPI are real income protection plans, worked out by income each month rather than a mortgage, or am I wrong?
Is that why I'm not a financial advisor???

regularsaver1

policies do not cover loss of work

are you able to build up some savings for a "rainy day fund"?

kiwiscot_2

Hi there.

Yes - i'm doing that at the same time, as well as collecting funds for the inevitable tax return.

I just need to make sure the policy I find is the right thing, that I'm not wasting what money I have left each month on the wrong type of Insurance.

Maybe that's the answer, in the end - keep saving so that I have enough to cover me for a six - 12 month period when I could be 'unemployed'?

dunstonh

ASU plans will not pay out to the self employed unless you cease self employment and sign on. So periods of no work wont be covered.