Income and sickness protection insurance

[MyUserName]

You clearly haven't the privilege of working in insurance. Their ability to not have enough office space, stained carpets, desks, chairs etc is similar to other sectors I've worked for. In fact the only clients' I've had who haven't had issues with infrastructure are the ones where most of the work is done remotely well.

FTFY

[Stevie Wonder Boy]

Hi,

I have been contracting now for almost 3 years and have never taken out income or sickness protection insurance.

How many of you have this insurance and do you recommend it?
I am fortunate that I do build up a nice warchest every year so always have that to fall back on, mind you I have never been out of work for over a month.

What do you think?

As other people have been saying, pretty unlikely to pay out. Despite the comments about insurance companies being thieves or not, the reality is that most insurers don't understand contractors, as such the products they offer don't really work. They basically understand Employed or Self-Employed, but not contractor ltd.

[psychocandy]

Looked into this in the past. VERY expensive it was.

[SueEllen]

As other people have been saying, pretty unlikely to pay out. Despite the comments about insurance companies being thieves or not, the reality is that most insurers don't understand contractors, as such the products they offer don't really work. They basically understand Employed or Self-Employed, but not contractor ltd.

Hence why you need advice to confirm that the insurer will pay out to contractors.

There are other threads older threads on this and a couple of them mentioned some insurers by name, so it would be worth the OP using google to find them.

[BHicks]

I don't believe that this kind of insurance would pay out if you need it.

I'll bet that T&Cs would exclude most reasons for needing it.

That's where speaking with a professional financial advisor can pay dividends.

Dentist and General have a plan that will pay out from day 1, I've had this in place for some time and recently have had to make a claim against it due to an injury that meant I couldn't get near a keyboard (office or remote) for several days. I ended up having to get the GP to make a housecall and he couldn't believe that there were plans that would pay out from day 1 either.

You can also get plans that will pay out after 30/60/90 days as mentioned elsewhere. Those (as you may expect) can be cheaper due to their deferred nature. As everybody's needs and circumstances are different it's worth getting professional advice.

[Mark McBurney@CMME]

This is one area that definitely needs some advice as a contractor as, as yet, there are no providers who will cover flat contract rate (well, there is one however I have absolutely no confidence that they would actually pay out, based on our conversations with them).

You can only cover taxable income, which is fairly useless if you work through an umbrella scheme other than the 'onshore' types, as they'll cover your basic c.£10k a year and will only ever pay out a maximum of 60% of this (the idea being that it covers your basic costs and doesn't make it more attractive to stay off work), or as a LtdCo contractor salary and dividends. The problem is, however, that income verification is only at the point of claim, so it's entirely possible that you might take out a policy to cover you for, for example, £3,000 per month, and then you take a little less out of the company one year, and all of a sudden you're paying for cover that you can't get.

As above, some providers will pay out on 'day one' of illness, and you can generally choose whatever 'deferred' period (i.e. the time from being off work until you can make a claim) you want (the longer the deferred period, the cheaper the premiums - you're more likely to be off work for 4 weeks than 26), generally deferred periods are anywhere between 4 weeks and 26 weeks, occasionally 52 weeks.

Risky to go in 'blind' without some sort of advice, and it's fair to say that it's not for everyone, however it can be a massive, massive help if you're ever in the position of being unable to work long-term.