Just 4% of self-employed workers have income protection in place, leaving the majority vulnerable to financial difficulties if they are suddenly forced to stop working through illness or accident.
In its survey of more than 9,000 adults, LV= identified the self-employed as a niche group who would struggle to make ends meet if they stopped earning. This is partly down to the fact that they have no employer’s safety net and little, if anything, in the way of emergency funds.
The benefits of income protection
Income Protection pays out a regular income if you’re unable to work due to an accident or illness or with certain policies, unemployment. For a monthly premium that can be adjusted to suit your budget, this valuable insurance will help to reduce stress, prevent your family suffering financial hardship and help you get back on your feet.
And budget is clearly a factor when it comes to the self-employed taking out protection, with two fifths (41%) surveyed saying they could not afford to save money on a monthly basis.
LV= also found there was a lack of understanding among the self- employed, which could account for such a large number having no income protection cover. In fact, four out of ten self-employed workers mistakenly believe they aren’t eligible for this sort of cover.
How can you protect yourself?
Most of us don’t think twice when it comes to protecting our vehicles or treasured possessions, and yet it’s our income that enables us to enjoy these material things. Those of us who are employed may have some kind of cover provided by their employer but if you’re self- employed you could be exposed.
If you’d like advice on how to protect your finances, or you’d like to review your protection needs, please get in touch.