Eastlake & Beachell Ltd - Protecting Your Income
Marie Beal, Sales Executive for Eastlake & Beachell, reiterates how important it is to ensure that if accident, illness or injury were to occur, your finances would be taken care of...
Protecting Your Income
The most important part of any one man band self employed business – Is the one man!
If you are unable to work through accident, illness or injury, as a self employed individual, you are entitled to claim from the State. However, this is usually a lengthy and arduous task and for less than £70 per week, often proves inadequate for your needs.
You can buy a policy that will protect your income from almost anywhere – the supermarket, the bank, the building society and at the car tyre centre!
Although it is extremely important to protect your earnings in order that you may continue to pay your mortgage, rent, bills, food, car, mobile etc. You must be aware that there are significant differences between the types of cover available, the costs and the varying levels of protection, these are split into the following categories;
The Personal Accident & Sickness Policy
This is the cheapest form of cover available.
This type of contract is usually recommended by the banks and building societies.
It is paid for annually, similar to a car or van policy.
The disadvantages of a personal accident and sickness policy are:
1/ It will only pay out for accident and sickness, they class joint problems and bad backs as wear and tear and will often dispute this type of claim.
2/ They will only pay out once for each part of your body, this can cause problems for clients with bad backs or joint problems where the ailment tends to re-occur.
3/ If the accident or sickness is likely to keep you from work long term, or indeed permanently a personal accident and sickness policy will only pay you an income for a year (2 years maximum)
Mortgage Payment Protection
This policy will usually be sold to you by a bank, building society or mortgage advisor.
It covers you for accident, sickness and redundancy.
Although the total cost is calculated to cover you for all of the above scenarios, as a self employed person you are not able to claim for redundancy.
There is usually a long waiting period between injury and claim and it will often only cover you for mortgage repayments and not your other household bills and food.
There is also a time limit on how long the policy will pay before you are expected to return to work.
The Direct Sell
There are certain companies who send their direct salesman round the yards or knocking on doors selling income protection.
They often feel the need to show potential new customers a list of anyone within a 20 mile radius who has already bought the contract.
There are usually multiple policies involved namely:
The first policy will only pay out if you are hospitalised, which is considerably rare, as hospitals have a shortage of beds, unless the problem is serious, the hospital will always try and send you home.
The second policy pays out for accident only, the third pays out for sickness only and the fourth and final policy will cover you for critical illness.
The combination of all 4 contracts can prove expensive; there is also a lot of small print on these policies that you should be aware of and we urge you to read carefully before signing.
Permanent Health Insurance
This is the most comprehensive form of Income Protection available.
It is paid monthly by direct debit.
You can claim over and over again for the same problem and if you are unable to work again it will pay you an income for the rest of your working life (until retirement).
The disadvantages of this type of contract are the farrier is classed as a ‘high risk’ occupation and subsequently a lot of Insurers won’t pay a claim until the client has been off work for a minimum of 8 weeks.
There are, however, Insurers that will provide cover a lot sooner, which is why it is best to consult an IFA, like Eastlake & Beachell Ltd, who can recommend the best contract available in the open market.
We also have exclusive schemes set up for farriers, which we are happy to discuss with you in further detail upon request.
The majority of claims we have had over the last 20 years are for bad backs, joint problems and accidental crushes, they are mainly due to unfortunate accidents, which is why you should give Income Protection serious consideration.
Please contact me if you would like to discuss the matter further or you would like an idea of cost -
Telephone: 0116 204 4624