You could risk financial ruin if you don’t have a policy in place
Being self-employed can give you the freedom and flexibility that standard employed jobs can’t give you, but there does lay the heavy burden of being the sole person in charge of your income and finances without any added benefits which are offered by being in employment.
If you were to fall ill then having life insurance with critical illness cover would be a blessing, where you would receive a lump sum to pay for private medical bills or towards your mortgage repayments. But there is an unsettling number of people in self-employment who are putting their livelihood and their families at risk.
Recent research has suggested that a staggering 93% of self-employed workers have no critical illness cover, meaning they will risk financial ruin should they need to take long-term sick leave. With almost 4.8m self-employed workers in the UK – according to government statistics, there are up to 4.4m people at risk equating to £300billion in lost earning collectively – an average of £67,000p/a.
PayingTooMuch.com Life Insurance Channel Manager Rob Dales said: “Planning for the future is essential. People can face financial ruin and if they are a manual labourer this risk is increased as they could get injured on the job. If they don’t have critical illness cover then quite simply, their business will almost certainly close, or they could even lose their home.”
So, what is critical illness cover?
Critical Illness Cover pays out a lump sum if you're diagnosed with a critical illness that insurers cover that meets their definition, or if you meet the definition of total permanent disability.
Critical illness cover can also benefit you should the worst happen to a family member as many policies include a children’s benefit, which pays out a lump sum if any of your children are diagnosed with a children’s critical illness that is covered. That way you can spend the required time with your family and not be as financially burdened as you are emotionally.
There are three types of critical illness cover which you can buy:
- Increasing cover - Your cover increases each year in line with any increase in the Consumer Prices Index (RPI)
- Decreasing cover - Cover amount decreases each month broadly in line with a repayment loan using a fixed interest rate
- Level cover –The amount of money you're covered for is fixed at the start of the policy and won't change.
What can you do to ensure the best value life insurance?
If you would like to buy a life insurance policy with critical illness cover, or would like to receive a quote, please contact Rob and the life insurance team on 01243 219 972 or visit www.payingtoomuch.com/insurance/life-insurance