Self Employed Sickness Insurance Cover

nikmondo · 11 February at 8:17PM

Hi all,

So recently my dad had a bout of prostate cancer which thankfully he’s recovering from but after complications with his operation, he couldn’t work for around 3 months. Luckily for my dad he’s in full recovery but also he was super lucky that his employer (a huge supermarket brand) gave him full sick pay for his time off work.

Anyway, this got me thinking…..if this had happened to me (and of course, it can in the future), having 3 months off work sick would virtually bankrupt me and I’d lose everything because I’m a self employed driving instructor.

Scarily, (and you can call me naive) this has never occurred to me that something like this can happen (I’m rarely off sick and also have a part time job on the side) so I’ve never prepared for it….and being self employed i don’t get the luxury of sick pay….

So I was wondering, what’s the best sort of cover in the event of something like this happening to me?

*Apologies if this has been posted in the wrong place.

Woodstok2000 · 11 February at 8:25PM

If you're just looking to cover something like cancer or a serious injury and pay off your mortgage or other lump sum debts, critical illness would be the best option. For ongoing monthly payout to cover bills etc you'd want income protection. You may want to consider both for full peace of mind.

MyRealNameToo · 12 February at 9:00AM

https://forums.moneysavingexpert.com/discussion/6654927/self-employed-sickness-insurance-cover

Income Protection is the marketing name of two different products but is basically what you want. The more basic product is Accident & Sickness (aka PPI), it's an annual policy, premiums change each year, it typically pays out for 1 or 2 years maximum even if you remain sick.

The full fat product is very different, typically you get a premium that never changes (unless you index link the benefit in which case the premiums are also indexed) and it pays out until you hit your policy end date (normally your planned retirement age) or until you are well enough to return to work. Needless to say it's notably more expensive than AS(U).

CI mentioned above is a very different product as it pays out a lump sum if you get one of a list of conditions at a certain severity. Doesnt matter if you will never work again or if you dont take anything but a few weeks off sick. However there are plenty of things that can take you out of work that arent on the list of covered conditions and so doesnt pay out at all.

Its not really designed to replace your salary for the rest of your working life but more to make material life changes after a major illness.

Mistral001 · 15 February at 12:51PM

Although the self-employed can no-longer get Statuary Sick Pay, they can get other benefits when sick, so you will probably not be left without any financial support, if you get sick while self-employed.

When I started my own business years ago and in the days cold calls nearly always came for fairly reputable companies, I got a few calls from insurance sales people wanting me to take out sickness insurance for self-employment. I thought the quotes were very high and out of the question for me. I doubt if the cost of their premiums are any lower now.

However, I would consider ways of protecting your business from sickness as, even if you have sickness insurance, your business will be left without someone running it, if you are running the business single-handedly or are a one-man/woman-band. A partnership is the obvious answer, or just think through what you would do if you were sick. Could you run it from your bed? Is there anybody who would be willing to step in and help you? If you have staff, would they be able to carry on without you? The self-employed are notorious for feeling that they are indispensable, when in fact they are not.