If you’re self-employed and someone asks about the perks of not having a boss to answer to, chances are you could rattle off a list till the cows come home. With the potential to earn more and the freedom to choose your own hours, steering your own ship can open up your life to a range of lifestyle benefits.

But with all the upsides of being your own boss, who'll replace your income if you can't work or if you pass away?  We've got tips for finding the cover to help protect you and your loved ones.

Set for life

Some companies offer death-in-service benefits to protect families' income if an employee passes away during employment. When you're self-employed, life insurance can give you similar protection that might offer a higher payout.

Whether you want a fixed amount or only need to cover mortgage costs, there are two life insurance options: 

  • Level term - a guaranteed cash amount if you die, so we could help maintain your family's lifestyle, and could help cover future expenses (university fees, for example). It's up to you how much coverage you need and how long it lasts.
  • Decreasing cover – as the name suggests, the amount paid out decreases over time, so it's normally less expensive than level-term insurance. However, if you take out a policy with us, you'll have peace of mind that the policy will pay out if you are diagnosed with a terminal illness, that meets our definition and aren't expected to live longer than 12 months, during the policy term.

Here's to your health

The responsibilities that come with being self-employed can be overwhelming. It can also mean working longer hours than having a job and possibly without a steady income. Over time, your health and general wellbeing could suffer due to stress and other risks from your work. For example, manual labour can lead to injury from the repetitive lifting of heavy goods. 

Having cover in place means you and your family can maintain living standards if you can't work. 

From health insurance to income protection and critical illness, here are three options to consider:

  • Health insurance - having health insurance means you can return to work sooner than relying on the NHS. Our health insurance comes bundled with a range of wellbeing tools like apps, helplines, and advice to help you live your best life and support general wellbeing.
  • Income protection - if illness or injury keeps you from working for a while, you can focus on recovery instead of worrying about how you'll pay your bills. You get a percentage of your lost earnings, which can help you cover your monthly expenses.
  • Critical illness - suffering a life-changing setback like a heart attack or stroke affects the whole family. A lump sum of cash can be paid out tax-free to help manage the situation and maintain your family's lifestyle.

Number crunching

Before considering a policy, it’s wise to figure out how much cover you might need to replace a shortfall in your household’s income.

If you want income protection or critical illness cover, think about your household spending. There are four main costs associated with daily life: housing, gas and electricity, food, and travel.

Based on these costs, you'll know how much you'll need to help cover your monthly outgoings. This will directly impact your insurance costs (also called premiums).

Using our  life insurance calculator you can figure out how much your loved ones would need if you died unexpectedly.

If you prefer to do this yourself, here’s how to estimate how much cover to budget for:

  1. Calculate how much you spend on the household each year. 
  2. Multiply that number by how many years until your youngest child turns eighteen (or older to cover further education), your partner retires, or your mortgage is repaid. This gives you an idea of the financial gap to fill if you were to pass. 

For example, if you contribute about £10,000 a year and your youngest child is three, that leaves fifteen years to cover. Therefore, you might want to consider life insurance coverage of £150,000.

You can find more information about our life insurance on our helpful FAQ page.

Looking for life insurance?

Our life insurance page explains what you need to know about our cover.

Contact us

Still need help? Give us a call.

0800 068 5549

Monday to Friday: 8:00am - 6:00pm

Saturday and Sunday: Closed

For our joint protection, telephone calls may be recorded and/or monitored. Calls to 0800 numbers from UK landlines and mobiles are free. Our opening hours may be different depending on which team you need to speak to.