Shield your earnings from the unexpected
Regular workers have death in service benefits, sick pay, and statutory holiday pay. But what about contractors and the self-employed?
By arranging protection cover with us, you can safeguard your income if you become seriously ill. This will ensure you’re covered at a time when you need your income the most.
Income protection for contractors
Permanent employees have both statutory and ‘occupational’ sick pay. SSP is what employers are legally obliged to pay when an employee is off sick. ‘Occupational’ health pay is what they choose to pay, which normally covers up to three months’ absence.
Contractors working under an umbrella payroll can get SSP of £118.75 per week for a limited time, but limited company contractors have to cover themselves for periods of sickness. Self-employed people can try to claim ESA from the government, even contractors. But the hurdles are huge, and rarely cover the genuine loss of income. But, without any other form of protection cover, that’s often contractors’ only course of action.
That is, unless they take out bespoke income protection for contractors.
Advantages of contractor income protection
If you’re unable to work due to long-term illness or injury, income protection cover can:
Replace up to 65% of your contract income
Ensure your financial stability if illness or injury keeps you from working. Get peace of mind, when you need it most.
Receive your benefits monthly
In the event of incapacity, you'll begin receiving monthly payments after your deferment (waiting) period.
Flexible tax payment options
If you work via a limited company, you can match how you pay tax to your financial strategy. You can either pay the premiums through the company, then only pay tax upon receipt of benefits. Or, pay premiums after tax and enjoy tax-free benefits thereafter.
Choose cover up to retirement age
You can take out a long-term income protection policy to cover you up to retirement age. This offers financial stability throughout your working life.
Protect your hard-earned lifestyle
Without income protection, illness or injury could jeopardise everything you’ve built: your mortgage, savings, and lifestyle. Don't risk it!
Free protection cover review
Income protection is there to preserve your lifestyle when you’re too ill to work. But, through experience, we know that all contractors are unique. What’s important for one contractor isn’t as high a priority as for the next. That’s why there are different levels of cover.
Any one of our protection specialists can walk you through the process to help decide which level of cover is right for your situation. Even if you have a policy in place, is it still relevant? When was the last time you reviewed it with an expert?
We age and we grow, as do our families. What was right for you once may not be as relevant today. That’s why it’s important to regularly review your policy, especially if:
- It’s a policy you’ve ported over from a previous working scenario, or
- Your current situation and/or hopes for the future have changed
How does income protection work?
When you choose income protection through us, we’ll help you source a policy that matches your specific needs. You can rest easy knowing that, should the unexpected happen, you've stabilised your financial future.
Share your details
Start by telling us about your financial situation and what you need to cover. We’ll use this information to find the best contractor income protection policy for you.
Choose your cover
We’ll present you with tailored options, including flexible tax handling. You can then choose how you want to manage paying your premiums and receiving any benefits.
Get protected
Once you’ve selected your policy, you’re covered. If illness or injury prevents you from working, you’ll receive up to 65% of your income, bringing you instant peace of mind.
Are you ready to secure your future?
Start your protection journey today by filling out our simple quote form:
Stage 1: Select the protection type.
Stage 2: Fill out the quote form for your selected product.
What is the waiting period before receiving a pay-out?
The deferment period is the time you tell your insurer you can wait before receiving your first payment. That period can be as short as four weeks, or up to a year.
Your financial situation will often dictate which works best for you. If you’re new to contracting and haven’t accrued much in the way of savings, you’ll want a shorter deferred period.
If you’ve accumulated savings (and don’t mind using them to pay for your time off sick), you can choose a longer deferential period. The longer you set that period, the less the insurance premiums will cost you.
How much is your monthly pay-out?
With a standard (personal) income protection policy, contractors can cover up to 65% of their income. Alternatively, with an ‘executive’ policy, contractors can ringfence up to 80% of their annual salary and dividends combined.
Most contractors see a huge jump in their income when they begin contracting. You may not need to cover every penny you earn.
Do a simple budget and costings exercise, first. But, do consider that you may have additional expenses* if you’re stuck at home for an indefinite period. When you work out the amount you need to comfortably get by, use that figure as the guide to your cover amount.
How your lifestyle can change when you’re ill
You might think you’d be quids-in when it comes to living expenses when you’re off work ill. And, yes: you’ll have zero commuting costs. But (depending on where you live), your life at home will soon eat into any savings.
The most obvious cost, but not negligible, is constantly heating your home to comfortably encourage your convalescence. But there are other not-so-obvious costs you might consider:
- A partner sacrificing some of their own work time to look after you;
- Sourcing home help if you’re alone/your partner cannot get time off;
- Adapting your home/bathroom to accommodate impaired mobility and dexterity;
- Buying/renting a car that accommodates your restricted mobility.
One key factor to securing any payout is that the insurer sees you’re making strides to get back to work. Making these adjustments (if they’re necessary) is a clear sign of positive intent.
Protect your contract income: essential tips
When you take out contractor income protection, you should feel comfortable with the policy's finer details. These significantly impact your coverage. We'll help you make the right choices based on your financial situation, including covering these key points:
Choosing your deferment period
Cover what matters to you
"Own occupation" income protection
Inflation-proof your income
Beware of policies with limits
Talk to an expert...
When it comes to taking out income protection, there’s a lot for contractors to consider But, when you consider your unique situation, you’ve much more to discuss before choosing the policy that’s right for you.
Our protection advisers have years of experience and know what questions to ask based on answers you give them. It’s difficult to appreciate how much your life will change if you have a serious illness. We can help you realise the implications and ensure you get the right amount of cover for you…
…but don’t leave it too late
Don’t wait until you have an accident before taking out your contractor income protection. With regards to protecting your lifestyle, prevention is 100% better than cure. Don’t throw that lifestyle away for the sake of a quick consultation with an experienced protection specialist.
How to protect your income, home and family
Executive income protection
Life insurance cover
Critical illness protection
