Income protection is essential for the self-employed
Tue, 19 Oct 2010
With more people considering becoming self-employed, partly due to the recession, it is essential they do not overlook financial protection.

According to research conducted by mortgage lender Kensington Mortgages, over a million more people have started working for themselves since March 2008. Individuals who are self-employed rely solely on their income to support themselves and do not receive sick pay or have access to income protection (IP) provided by an employer so if they fall ill, they could be out of pocket almost immediately.

The self-employed may be entitled to the government's Employment and Support Allowance, but this only pays up to £97 per week and there are strict eligibility criteria.

Andrew Jenkinson, senior adviser at Drewberry Personal Insurance, a London-based insurance broker, said: "IP, life cover, critical illness (CI) cover and health insurance are all important products for self-employed individuals. However, life only pays out on death and CI only pay out on certain illnesses so if the individual is ill for any other reason, they won't be covered. Our first port of call is to protect the person's earnings and for this they need an IP policy."
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