Do I Need Income Protection Insurance If I Am Self Employed?


Being self-employed comes with a lot of perks – flexible schedules, tax breaks, and unregulated holidays are just a few. However, when you are working for yourself you can miss out on the advantages that come along with being an employee, such as benefits, security, and paid leave.

In order to make-up for this and ensure you have the same level of financial security when self-employed, you should consider income protection insurance. Without employee benefits or income protection, your financial situation is always at risk.

Most adults are naturally responsible for all their expenses, including mortgages, utility bills, and groceries. So, if you are unable to work due to an illness or injury, how are you going to cover your expenses?

Income Protection is the right solution to the above problems, as it offers you up to 85% (usually 75%) of your regular income if you cannot earn a living due to injury or illness.  



The Importance of Income Protection Insurance for The Self Employed

Financial Security

First and foremost, income protection insurance for anyone who is self-employed provides financial security for themselves and their loved ones. Since anyone who is self-employed is not entitled to paid sick leave or paid annual leave, an income protection policy is the only option to secure your income in case of injury or illness.

Pay Debts and Bills

Even if your income stops, your expenses do not. So even if you can’t work bills won’t stop flowing through and your debts will pile up. Income protection insurance will allow you to continue to keep your standard of living and pay your bills, in a time when you need it the most.

Reassurance For You and Your Family

In difficult times reassurance is what you and your family need. Income protection insurance can give you peace of mind that your family will be financially supported, during a really tough emotional time. This peace of mind will also work wonders during your recovery, so you will stress less, and can focus on getting better.



How Does Income Protection For The Self-Employed Work?

Income Protection for anyone who is self-employed works the same way as standard income protection insurance for employees. You get a specific amount every month until you get back to work, as per your specific policy.

You will need to be able to prove your income at claim time and insures rely on your tax returns here. You should not insure yourself for a higher amount than your actual income as when a claim is being paid, the benefit will be based on your actual income rather than the amount you’ve elected to insure.

Your waiting period and benefit period are fixed when purchasing your policy. If you were unaware, a waiting period is the time you have to wait until you are eligible to claim and receive payments – the waiting period can be as little as 14 days to a maximum of 90 days – and the benefit period is how long you will be receiving the payment for. This can be 1, 2, or 5 years, depending on your policy.

Even though there are hundreds of insurance providers across Australia, Aspect Underwriting stands out from the rest. Why? Because Aspect Underwriting pays 85% of your income, if you suffer an illness or injury, while other insurance providers only offer 75%.

Dealing with Aspect is hassle-free – no phone calls or lengthy meetings are required. You can get an income protection quote from their website and get covered within minutes. Get an income protection quote from Aspect Underwriting and secure your finances today.

Mike Wallis

Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.