Is life insurance important if you are self employed

Is life insurance important if you are self-employed is a big question especially considering the scale of self-employment in the UK. According to Statista “there were around 4.2 million self-employed workers in the UK” as at October 2022 ( Source: Statista).

Interestingly, this is a fall from “a peak of over five million at the start of 2020” ( Statista). The fall was accounted for by the Pandemic, so it is likely to rise back up to numbers close to or exceeding the levels seen in 2020.

Considering the scale of self-employment, having insurance to protect you and your family becomes very important.

When self-employed do you need life insurance?

Being self-employed means that you are your own boss. It also means that you do not have some of the protections available when in employment like life insurance.

You need to decide for yourself what level of protection you need, and life Insurance is probably one of the first things to consider. This is especially s if you have a family that is dependent on you. Have a look at your monthly spending, including mortgage payments and consider how your family would cope without your income.

How much does life insurance cost?

The cost of life insurance is dependent on a range of factors. I suggest you consider reading our other article which sets out a lot of the key information around life insurance. Click the link below if you would like to read:

Life Insurance how does it work

In summary the cost will depend on several issues including:

• Level of cover
• Type of cover
• Term of insurance- in other words how long the policy lasts
• Your age- The younger you are, the cost should be lower.
• Your job- Higher risk jobs will be more expensive
• Your medical history- If you have a history of medical conditions, this could impact on your premium levels
• Where you live

You will be asked to complete a questionnaire when you apply. You may also be asked to undertake a medical examination, but this will depend on the level of cover and the insurer you choose.

It is wise to take advice at an early stage, so you make sure you get the right level of cover for your needs.

How much life insurance does a self-employed person need

The level needed is a very personal decision. You need to consider all the factors above and weigh this up alongside your attitude to risk versus protection. Once you have decided on the level and type of life insurance you would like, it is time to give quotes from potential insurers.

Other insurance protection a self employed person may consider

There are other forms of insurance which can give you protection but not just when you pass away. These protections can be considered alongside life insurance and in some instanced can be combined with life cover. The list of other covers could include:

Critical Illness insurance– Quite often combined with life insurance. This provides cover if you were to become seriously ill. We have written an article specifically about critical illness insurance. You can read this article if you click the link below:

How important is critical illness insurance

Income Protection Insurance– This is type of insurance pays out if you are unable to work because of accidents, illness other causes that the insurer accepts.

Private Health Insurance– This insurance provides cover for diagnosis and treatments if you are unable to access the NHS services you need in a timely manner.

Each of these additional covers are subjects in their own right and will be covered in other articles we publish.

Take advice on insurance for the self employed

Is life insurance important if you are self-employed. The answer is clearly yes.

If you want to speak to people who know the life insurance market, then get in touch with us at My Life Insurance and we can help you get the best quotes for your needs.