Life Insurance for Self-Employed People – Why It’s Often Overlooked
Self-employed and worried about what would happen if illness or loss of income hit? Learn why life insurance and income protection for freelancers is often overlooked and why it matters.
If you’re self-employed, you already know the deal: no sick pay, no employer benefits and no guaranteed monthly salary. Your income depends on your ability to work. Yet many freelancers skip life insurance or income protection.
Here’s why protection matters—and why it’s often ignored.
Why Life Insurance Is Essential for the Self-Employed
When you work for yourself, you are the business. If illness, injury or death happens, income can stop fast. Life insurance helps your partner, children or family stay financially secure. It can cover:
- Mortgage or rent
- Business debts
- Living costs
- Education costs
- Outstanding loans
Why Many Self-Employed People Skip Life Insurance
Common reasons include:
- “I’ll sort it later.” Running a business leaves little time for personal finance tasks.
- No employer benefits. Employees get nudges and workplace cover; freelancers don’t.
- Cost worries. Many assume it’s expensive—often it’s more affordable than expected.
- Irregular income. Freelancers worry about committing to long-term payments, but many insurers offer flexible options.
Types of Insurance Worth Considering
Key protections for self-employed people:
- Life Insurance — pays a lump sum if you die.
- Critical Illness Cover — pays if diagnosed with a serious illness.
- Income Protection — replaces part of your income if you can’t work due to illness or injury.
- Business Protection — for those with partners or business debts.
Income Protection for Freelancers: How It Works
Income protection is one of the most useful tools for freelancers. It usually replaces 50%–70% of your regular income and pays until you return to work, recover, or the policy ends. It covers the gap that exists because freelancers typically don’t receive Statutory Sick Pay or employer sick pay.
What to Consider Before Choosing a Policy
Think about:
- Monthly expenses: What must be covered if you can’t work?
- Level of cover: Basic safety net or full income replacement?
- Deferred period: When do payments start — 4, 8, 13 or 26 weeks?
- Existing savings: How long could they support you?
- Dependants: Partners or children who rely on you.
Talking to an adviser helps you choose what you genuinely need, not just what’s advertised.
Final Thoughts
Life insurance and income protection aren’t “nice to haves” for the self-employed — they’re essential. Without employer benefits or a financial backup, freelancers face greater financial risk. The good news is finding the right cover is simple with the right guidance.
Not sure what cover you need?
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