Life Insurance for Self Employed
The freedom of owning your own business often outweighs the financial stability of working for an employer. However, after you stop receiving benefits from your employer, such as health care, dental, and vision coverage, retirement accounts, and life insurance, you are on your own to replace them.
As you make the shift to being self-employed, having health and life insurance, and setting aside money for retirement are frequently top of mind, but purchasing a life insurance policy when self-employed can be overlooked. And it turns out that a lot of employees depend on the life insurance provided by their employers. According to LIMRA’s 2022 Life Insurance Barometer study, 23% of respondents had life insurance through their employer solely. That means that when potential workers leave their full-time occupations, almost a quarter risk compromising the financial security of their loved ones.
The good news is that you can purchase self-employed life insurance to protect loved ones in case the unthinkable occurs. But how do you get started? We’ll explain why you need life insurance as a self-employed person, how to purchase life insurance with a flexible budget, and how to pick the best plan for you.
Can I Get Life Insurance if I am Self-Employed in Northern Ireland & UK?
If you are self-employed, it is possible to secure family life insurance in NI & UK. Since 2001, self-employment has been gradually increasing in the UK, where it now accounts for up to 15% of the workforce [1].
The fact that you work for someone else or are self-employed will not affect your ability to obtain life insurance. Only if you work in a high-risk profession is your occupation likely to influence your insurance coverage.
While being self-employed may include additional paperwork, Life Expert can make the process of buying life insurance less stressful.
Life Expert can compare quotes and help you secure the right life insurance for self-employed, to meet your life insurance policy needs at the best price.
FAMILIES PROTECTED
What is Self-Employed Life Insurance in NI & UK?
Life insurance for self-employed is not a stand-alone life insurance product.
It merely refers to a life insurance policy that a self-employed person purchases.
There are numerous reasons why self-employed people elect to purchase life insurance, and the choices accessible to them are the same as for people who work for a company.
How Does Life Insurance for Self-Employed People Work in NI & UK?
Life insurance for self-employed workers will work no differently than any other life insurance policy in Northern Ireland & UK.
Life Insurance can work as simply as:
- Contact a friendly member of our team at Life Expert to get your application started. We can provide you with free life insurance quotes from our panel of insurers to get you the most suitable policy in NI & UK.
- Once you have chosen the right life insurance policy & your application has been accepted, your life cover will start.
- You will need to continue to pay your monthly life insurance premium to keep your cover valid.
- If you pass away during the term of your life insurance policy in NI & UK, your loved ones can notify your provider of the death and make a claim.
- On receipt of a successful life insurance claim in Northern Ireland & UK, the provider will pay out a lump sum to your loved ones.
- Providing you with peace of mind that your loved ones are taken care of financially should the worst happen.
Is Life Insurance Worth Getting If You’re Self-Employed in Northern Ireland & UK?
In general, anyone who has dependents—a partner and/or children—should have appropriate life insurance. Many people who work receive death in service, which is a benefit paid to your family by your company if you pass away (usually a multiple of your salary).
However, since you are self-employed, you are not eligible for this benefit. In other words, your loved ones wouldn’t get financial assistance if the worst happened.
This is where life insurance for self-employed people may be very helpful because it will give your loved ones a cash lump amount that they can utilise to make ends meet following your demise.
Without life insurance in Northern Ireland & UK, your loved ones would have to:
- Replace lost income – £152,747 is the average cost of raising a child until 18 [2].
- Meet mortgage repayments – £131,724 average UK mortgage debt [3].
- Pay for additional childcare – £263.81 the weekly cost for full time childcare [4].
- Cover the cost of your funeral – £8,864 average total cost of dying [5].
There is also an increased need for life insurance for self-employed if you work in a high-risk occupation, such as:
- Bricklayer
- Carpenter
- Electrician
- Plumber
- Labourer
- Roofer
- Painter & Decorator
Why Choose Life Expert for your Self-Employed Life Insurance Policy in NI & UK?
Affordable life insurance rates for self-employed workers.
Life Expert can compare a range of life insurance policies to help you find the most suitable option.
Rated ‘Excellent’ on Trustpilot.
Help & guidance throughout the entire application process.
Quick & easy support, we are only one phone call away.
How Much Life Insurance Do You Need If You Are Self-Employed in NI & UK?
The things you want to protect and the amount of money you have available will determine how much life insurance you need in NI & UK.
Receiving death in service benefits can help persons who are employed cut down on the amount of personal insurance needed because these two types of coverage can be combined to offer a fully comprehensive solution.
However, as was previously mentioned, self-employed individuals are not eligible for this benefit, so it’s crucial to make sure the amount of life insurance you get is adequate to provide for all your loved ones’ needs.
What Do You Want To Protect?
- Self-employed salary.
- Mortgage debt.
- Rental expenses.
- Family living costs.
- Childcare costs.
- Funeral costs.
- Outstanding debts.
What Are Your Personal Circumstances?
- How much mortgage balance is outstanding?
- How many children do you have?
- How old are they?
- What is your partners employment status?
- What savings/assets do you have?
How Long Do You Need Cover?
- Until your mortgage is paid off.
- Until your children are financially independent.
- Until you retire.
- For the remainder of your life.
Getting the help of an expert insurance broker service, like Life Expert, can help you to determine the level of life insurance cover you require.
Our team of experts can talk you through your personal circumstances and reasons for wanting to take out life insurance cover.
We can then advise you on the most suitable options and guide you through the application process.
What is the Best Life Insurance for Self-Employed?
Whether you are self-employed or employed has no bearing on the type of life insurance that is ideal for you.
Instead, the life insurance policy that meets all your needs at a price that fits your budget will be the greatest choice for you.
There are numerous options for life insurance plans, each better suited to safeguarding various facets of your life. These consist of:
- Term Life Insurance
- Family Income Benefit
- Whole of Life Insurance
- Over 50s Life Insurance
There are also additional forms of cover you may want to consider taking out alongside your life insurance policy:
- Terminal Illness Cover
- Critical Illness Cover
- Income Protection Insurance
Types of Life Insurance for Self-Employed in NI & UK
Term Life Insurance for Self-Employed in NI & UK
Term-based life insurance for self-employed in NI & UK offers protection for a predetermined amount of time (the term). Your loved ones will receive a pay-out if you pass away during this time.
Term life insurance comes in two forms:
Level term life insurance for self-employed offers a pay-out that maintains its value for the duration of the life insurance policy, making it possible to use it to pay for recurring expenses like an interest-only mortgage, living expenses, funeral costs, or providing an inheritance.
Decreasing term life insurance for self-employed in NI & UK provides a lump pay out which reduces in value throughout the policy term. Because your sum assured might decrease in pace with your remaining mortgage balance, it is suitable for protecting a repayment mortgage. It is also the least expensive type of life insurance.
At Life Expert, we can help you compare both level & decreasing term life insurance quotes for self-employed in Northern Ireland & UK.
Over 50s Life Insurance for Self-Employed in NI & UK
Lifelong coverage is available through over 50 life insurance, which requires no medical information and guarantees acceptance for UK citizens between the ages of 50 and 85.
This can be a great option for self-employed workers in this age bracket who’ve previously struggled to get cover due to ill health. Due to the unknown risk to the insurer, the sum covered is much lower than that of other policies (typically capped at £20,000).
A waiting period, which prevents your policy from paying out if you pass away within the first 12 to 24 months, is also probably going to be implemented. Your loved ones will receive a reimbursement for any premiums you paid.
Persons in their 50s may wish to examine additional types of cover to make sure all elements of their life are protected. The most prevalent age range for self-employed employees is 45 to 54[1].
Let Life Expert help you compare multiple life insurance policies to find your ideal option.
Whole of Life Insurance for Self-Employed in NI & UK
Whole life insurance for self-employed in NI & UK offers lifetime coverage and ensures that your loved ones will be paid out after your passing (not if).
It frequently serves to offer an inheritance or pay for living expenses for the family or funeral expenses.
Young people who take out whole of life insurance may end up paying more into the policy than it would ultimately pay out because they will have to continue paying payments until they die. This makes folks who are older and in good health the greatest candidates for this form of coverage.
The best way to leave your loved ones an inheritance is through whole life insurance.
Family Income Benefit for Self-Employed in NI & UK
Family income benefit for self-employed in NI & UK is a term-based policy that offers monthly, tax-free payments to your loved ones in the event of your passing within the policy term.
The payments will keep coming to your family until the insurance expires.
For instance, if you have a 20-year insurance and you die away five years into it, the remaining 15 years of the policy will be paid out.
It can aid in long-term budgeting and would be great for replacing your self-employed income if you were no longer able to support your family.
Additional Policy Types for Self-Employed in NI & UK
Terminal Illness Cover for Self-Employed
It will allow you to make an early claim on your life insurance policy if you’re diagnosed with a life-threatening illness and given less than 12 months to live.
Critical Illness Cover for Self-Employed
When a major sickness (one that is listed in the policy) is diagnosed, critical illness insurance will pay out a lump payment. This can assist in paying for medical care or replacing lost income.
For an additional cost, coverage can be added to a life insurance policy or purchased separately from a policy from some providers.
Income Protection Insurance for Self-Employed
If an accident or illness prevents you from working, income protection insurance will reimburse you.
This can help a self-employed person to provide needed financial support when you are unable to produce your regular income.
Although this policy type cannot be added to a life insurance policy, both can be purchased at the same time to offer a comprehensive protection option.
How Much is Life Insurance for Self-Employed in Northern Ireland & UK?
The exact price you pay will be determined by the level of risk you pose to the insurer (the likelihood of a claim being made).
Key factors taken into account by insurers when calculating your monthly life insurance premium include:
- Age.
- Health & wellbeing.
- Smoking status.
- Weight.
- Type of cover.
- Amount of cover (sum assured).
To assess the level of risk, insurers may also inquire about your line of work. For instance, whether you lift big objects or work at heights, etc.
If any high-risk indicators are found, you can notice an increase in your premiums as a result. However, you can still get the protection you require.
Is Life Insurance or Income Protection Better for Self-Employed in NI & UK
Life Insurance for Self-Employed
- Pays out in one lump sum to your loved ones.
- Will pay out if you pass away during the policy term.
- Sum assured up to £1,000,000.
- Will pay out for a wide range of deaths.
- Loved ones can use the pay out to pay off the mortgage, cover family living costs, pay for your funeral or it can be spent how they wish.
Income Protection for Self-Employed
- Will pay out monthly payments to you.
- Will pay out if you’re incapacitated and unable to work.
- Sum assured (or benefit amount) up to 70% of your usual income.
- Will pay out for a wide range of illnesses and injuries.
- Payments can be used to fund daily living costs, keep up with mortgage or rent payments, cover household bills.
It’s not necessarily a case of life insurance vs income protection as both differ in terms of what they cover and when they pay out. When you’re unable to work, income protection offers regular (tax-free) payments to replace your income (because of sickness or accident).
This can be crucial for self-employed people in NI & UK who don’t receive sick pay because you can prevent financial hardship for you and your family.
Typically, up to 70% of your usual income will be paid out to you after your chosen deferred period has come to an end, but this can vary depending on the provider.
While a life insurance policy will make a single, lump sum payment to your loved ones following your passing. If it falls within your budget, it can be advantageous for self-employed individuals to have many policies due to the various benefits of each.
Compare Life Insurance for Self-Employed in NI & UK
As a self-employed worker you work every day to provide for your loved ones, but have you secured their financial future yet?
At Life Expert, our team of experts can compare quotes from our panel of insurers to help you find the most suitable life insurance policy based on your personal circumstances and budget.
We’re also on hand to answer any questions you might have and decode any jargon. Our FCA-regulated life insurance broker service provides personalised and no obligation quotes.
Get in touch today to secure your free quotes and take one step closer to protecting your family.
Sources
[1] https://www.statista.com/statistics/318458/united-kingdom-proportion-of-self-employment-by-gender/
[2] https://cpag.org.uk/sites/default/files/files/policypost/CostofaChild2020_web.pdf
[3] https://www.finder.com/uk/life-insurance-statistics/
[4] https://www.daynurseries.co.uk/advice/childcare-costs-how-much-do-you-pay-in-the-uk
[5] https://www.sunlife.co.uk/siteassets/documents/cost-of-dying/cost-of-dying-report.pdf/