Income protection Insurance for Self Employed

superbailles

My partner and I have just had an offer accepted on a house (first time buyers) and are shopping around for the right insurances. I am self-employed as a music teacher and have many different sources of income. My understanding it that most of the income protection policies will only pay out if I lose all incomes, which is very unlikely. Is there a type of insurance which will top up self employed income if it dips below a certain point, or am I better off just putting as much as possible in savings? It would be good to have some security,  but I don't want to pay for insurance that I will never be able to claim on! 

Weighty1

Would the other sources of income stop if you fell ill and couldn't work?  If not, then there's no point insuring that income as you wouldn't be able to claim on those sources anyway.  Plus, income protection is designed to cover "earned" income so if they are due to investment or rental income, again, there's no point trying to insure them on an income protection plan.
If you have several different occupations then it differs from insurance company to insurance company.  Some will want to know about ALL occupations and based the premium on the highest risk occupation whilst others will only want to know about the main occupation and base premiums on that.

superbailles

Thanks Weighty 1 - all of it is earned income. I am a musician and music teacher, so income is from performances, schools and individual parents. So many revenues that it is unlikely that I would lose all. I had established that traditional income protection wouldn't be worth it, but wasn't sure whether there was an alternative...or if I should just put money aside myself 🤔 Just wanted to check that I wasn't missing anything!

Weighty1

So if you were diagnosed with cancer for example or injured your back and was stuck in your home for months on end due to being immobile and due to significant pain what makes you think you wouldn't be able to claim?

Putting money aside is not  normally a viable way of protecting yourself.  Even if you put aside £200/month then if you fell ill after 2-years you'd still have less than £5k.  An average claim on an income protection plan lasts 6-years (based on LV stats).  How many years would you need to safe for to provide an amount which is sufficient to cover you for 6-years?  It would be nigh on impossible to save enough.  Most income protection providers pay out on 90%+ of claims.  A percentage of those claims declined are declined because the person ceases to be incapacitated before the end of the deferred period.  There is a relatively low percentage of people whose claims are denied due to not being able to prove loss of earnings.  

rs65

superbailles said:

Is there a type of insurance which will top up self employed income if it dips below a certain point

Think that would be difficult to insure.  What incentive would you have to find new work if an insurance policy provided a top-up