Income Protection for Self-Employed
Being self-employed gives you freedom and flexibility, but it also means no sick pay or any other employee perks if life takes a turn. That’s where income protection comes in.
At Need Financial Planning, we’re here to make sense of it all. No jargon, just clear advice on how to protect your income and your family.
Quick Takeaways:
No sick pay? No problem. Income protection can replace a portion of your income if illness or injury stops you working.
Tailored to your work. Self-employed policies can be designed around fluctuating income and your unique needs.
Affordable cover. You decide how much to insure, how long it pays out, and how soon payments kick in.
Peace of mind. Knowing your bills and mortgage are covered takes the pressure off if you’re unable to work.
Friendly, expert mortgage advice backed by our happy clients.
What is Income Protection?
Income protection is an insurance policy that pays you a regular, tax-free income if you can’t work due to illness or injury. Unlike critical illness cover, it doesn’t just pay out once; it keeps paying until you’re well enough to return to work or the policy ends.
For the self-employed, this can be a lifeline, because you don’t have access to employer sick pay schemes.
Statutory Sick Pay (SSP) doesn’t apply to the self-employed. Without a safety net, your business and personal finances could be at risk.
It's not just about the money
Many protection policies come with extra perks, often at no extra cost. Depending on the insurer, you could also get:
👨⚕️ 24/7 GP access – Speak to a doctor anytime, from anywhere
💪 Rehab Services – Supporting your recovery
🦴 Fracture cover – Small lump sums for broken bones or minor injuries
👶 Children’s critical illness cover – Financial support if your child falls seriously ill
🧠 Mental health support – Access to counselling services
🧾 Second medical opinions – Confirm a diagnosis or explore other treatment options
These additional benefits help you stay supported—physically, emotionally, and financially—even if you never make a major claim.
Why is Income Protection Important for the Self-Employed?
No employer benefits:
Employees might get sick pay, redundancy, or group income protection. The self-employed don’t.
Bills don’t stop:
Mortgage, rent, utilities, and business costs still need paying.
Health risks are unpredictable:
Illness or injury could strike at any time, regardless of age or fitness.
Family security:
If others rely on your income, protection avoids stress and debt during recovery.
The financial safety net that income protection offers means that bills and living expenses can still be covered, you can focus on recovery, and you can avoid the significant financial strain that would come without it.
How Does Income Protection Work?
1. Choose your cover level:
Typically around 60% of your income (to reflect take-home pay after tax).
As a self-employed individual, it's likely that your monthly income fluctuates. So, when deciding on your level of cover, you'll need to be clear on what essential expenses would continue if you couldn't work (think mortgage/ rent, utilities, food, childcare etc.).
2. Set the deferment period:
This is how long after you stop working the policy begins paying. Shorter deferment = higher premiums.
To choose your deferment period, you'll need to consider how long you could cope without income i.e. how long would your savings last/ cover you for.
3. Decide how long you want the cover to last:
Short-term policies: Pay for 1–2 years per claim.
Long-term policies: Pay until retirement, recovery, or end of policy.
4. Premiums depend on:
Your age - the older you are at the time of applying, the higher your premium will be.
Your health - your premium may be higher if you have pre-existing health conditions or significant medical history.
Type of job you do - if your job is deemed to be 'risky' (i.e. injury is more likely) then your premium will reflect that.
Smoking status
Length of deferment period
Length of cover
Need a Hand?
We know income protection can sound complicated, especially when you’re juggling self-employed life. We’ll explain the options clearly and help find cover that fits your budget and lifestyle.
Ready to explore your options?
Prefer to email first? No problem!
Submit your enquiry here →
Need a Hand?
Prefer to email first? No problem!
Submit your enquiry here →
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You may also like:
Protection Guide
Explore protection options beyond income protection and learn how to equip yourself with financial resilience.
Strategy Call
Keen to talk details? Speak to our Protection Expert today to find out how to protect yourself, your family and your finances.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IMPORTANT: With investments, your capital is at risk. Pensions and investments can go down in value as well as up, so you could get back less than you invest.
Need Financial Planning Ltd is registered in England and Wales no. 10901658. Registered office, 123 High Street, Broadstairs, Kent, CT10 1NQ. Authorised and regulated by the Financial Conduct Authority. Need Financial Planning Ltd is entered on the Financial Services Register https://register.fca.org.uk/ under reference 977136. If you wish to register a complaint, please write to [email protected] or telephone 01843 228800. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234 567.
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