FACT – Statutory sick pay is £94 a week. Could you live on £94 a week and still pay rent, mortgage, buy food etc.?
If you had a cash machine in a shed in your garden that paid out a wage every week, would you insure it? The thing is, you do have a cash machine, but it probably doesn’t live in the shed. That cash machine is you. And what would happen if you weren’t able to generate the cash anymore? How long would you and your family survive financially?
Think about the things that you pay for each month:Your home; you will heat, furnish, maintain, and insure your home in case anything happens. You will buy food and clothes, and you might have to do that for others. Then there are the things that make you happy; leisure, sport, holidays, nights out, movies, books, hobbies. You might have pets and you probably have pet insurance, and if you drive a car you have motor insurance. And what funds this? – your income.
So if you were no longer able to work as a result of an accident or serious illnesses, what income would you have, and how would you pay for the things listed above? At Aspire Financial Services we recommend Income protection Insurance for all self-employed people otherwise you could be exposing yourself and your dependents to financial risk.
Are you self-employed and living in Cheshire?
Self-employment brings a certain freedom. But one downside is that if you are too ill to work or are laid up due to an accident your income dries up. Income Protection Insurance should be an essential part of your life.
What does it do?
Income protection insurance will pay you the equivalent of your take home pay for every month that you are off work due to illness or accident. The exact amount might vary, but it works out at between 60 and 65% of your gross pay.
How long will it pay out for?
There are two types of cover, full cover and low-cost cover. They will both pay your income if you can’t work, and they will allow for multiple claims for the duration of the policy. The main difference between them is that if something happened to prevent you from ever working again then full cover would pay out every month until the policy end date – normally your anticipated retirement age but low-cost income protection insurance would stop paying within a specified period, normally 1,2 or 5 years.
Will it pay if the accident is outside of work?
Yes. You are covered even if you have an accident anywhere that means you can’t work.
Does it only insure against specific illnesses?
No. Any illness that prevents you from working is covered by the insurance.
Is this only for self-employed people?
No, if you are employed and living in Cheshire, you should check onyour employer’s policy on sickness and accident pay? Some employers only offer a short time on full pay before you go onto statutory sick pay.
Choosing the right Income protection insurance for you can be complex and time consuming, so we advise talking to an experienced broker. Aspire Financial Services can guide you through this complex area to choose the most appropriate cover for your circumstances.