Who said that income protection is available for employed individuals alone? Because whoever that was didn’t know that even self-employed individuals can get coverage too. Income protection is basically a type of insurance that pays out in the event that the policyholder is not able to work for a certain period due to sickness or injuries. It primarily works as replacement for wages, so in case you suffered injuries from an accident or get sick and won’t be able to report for work for a certain duration, you won’t be lying helpless thinking where to get the financial assistance you need during this difficult time of your life.
Income protection for self-employed individuals can provide benefits in two ways – short term or long term. Short-term income protection usually pays a monthly income for up to 12 or 24 months should you have to take time off work. Meanwhile, long-term income insurance is there to protect your earnings as businessman against the risk of long-term illness or injury. Now it’s up to you to decide which one will best suit your needs. You can always seek advice from a broker if you’re not sure which one to get. Or better yet, ask recommendations from friends or colleagues who have already acquired income insurance in the past.
Now, you might ask, “How much coverage can I get as a self-employed individual?” Well, if you try to search the web, you may find that for self-employed people, income protection may cover up to 50% of the policyholder’s monthly income. So this means that if you will be incapable to work or run your business for a certain period due to sickness or injuries, your policy will pay you or your family with a monthly income amounting to half of what you earn in a month. This may not seem enough, but this is sure better than nothing. Just imagine how you and your will family live without you running the business for a while. This would such be a difficult time, and you don’t want to lose all your life savings just because of this, right? So even if the payout is not equal to what you earn, still it’s better to have income protection coverage than end up losing your savings and investments because of this unexpected turn of events.