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Hi, self-employed sole trader here, work as a forestry surveyor. Have just broken my arm as a result of a mtb crash, so wont be earning anything for some time to come.
While I know it's too late to get cover for the current injury, I'd like to be covered if/when it happens again. What policies are other self-employed people out there using? Are they worth it?
I took out critical illness cover which kicks in if I'm off for over 3 months.
I'll answer your last question: I don't think they're worth it (expensive, too many conditions and exclusions) but I'd love to hear what other s/e are doing. I think you are best off building a rainy day fund - say a couple of months living costs if you can - and only have insurance for catastrophic events (life insurance in my case).
Looking at critical illness cover, it seems they are more geared towards things like heart attack, stroke, cancer, MS, etc. Im thinking more along the lines of cover for mtb-related incidents, like a broken leg, which weould stop me doing my job for say 6 months.
Saw this article:
[url= http://www.theguardian.com/money/2013/aug/31/income-protection-off-work-sick ]http://www.theguardian.com/money/2013/aug/31/income-protection-off-work-sick[/url]
Looks like STIP (short term injury protection) would be most relevant to me. Anyone have experience of such policies?
[i]While I know it's too late to get cover for the current injury, I'd like to be covered if/when it happens again. What policies are other self-employed people out there using? Are they worth it? [/i]
We looked at this.
Basically you are just insuring money, and it's expensive (+10%), can have long qualifying periods and only covers short periods.
As an accountant I have completed the loss of earnings claim forms for quite a few clients. As a sole trader not much of an issue in making the claim other than proving income to date and prior year comparisons.
Limited companies are different as usually a basic salary is put through and the rest of the profits as dividends. Most insurance companies have only paid out the earnings, the salary. Different policies are normally required for loss of profits in a limited company so make sure you know what is covered.
I've been looking into this a bit and came across Sports Cover Direct https://www.sportscoverdirect.com
It seems decent because it covers you for other sports too. Not pulled the trigger yet though, want to look into it a bit more.
Limited companies are different as usually a basic salary is put through and the rest of the profits as dividends. Most insurance companies have only paid out the earnings, the salary. Different policies are normally required for loss of profits in a limited company so make sure you know what is covered.
Interesting to know & not something I'd considered - currently I'm blatently within IR35 so *guess* I'd be ok claiming salary as LOE if I was out for a while, but it's worth reading up on.
I've had a policy with Sports Cover Direct for a few years, but only put myself out of action for a couple of days - think it's for >2 weeks...
By the sounds of it, any fairly standard Personal Accident policy should do the job. As that Gruinard article says, they work by rating you on your "waiting period" at the start of a claim, then by how much you need cover for (weekly wage) and the cover type you want. It's very dependent on your job too - office work is tons cheaper than scaffolder!
To be off work completely gets you full payment (temporary total disablement), some also do a partial payment if you're able to do some paid work (temporary partial disability).
Personally don't have any - just have 6-7 months net in the bank. Any decent insurer should have a policy for this often as a bolt-on to a household cover. Try NFU as I think they used to have one of these, not cheap though and you may be better off seeing what options an IFA can give you.