Contractor Guides

Are you protected from the unexpected?

Read on below for a guest post from contractor mortgage specialists, CMME. As a self-employed professional, it can be a…

Author Photo by Martin Baxter

Read on below for a guest post from contractor mortgage specialists, CMME.

As a self-employed professional, it can be a worrying time if you find yourself unable to work due to injury or ill health. Your income may stop but financial commitments such as mortgage or credit card payments will continue, leaving you and your family vulnerable to financial difficulties. And, as a self-employed individual, you may no longer have employee benefits sick pay or ‘Death in Service’ life cover to fall back on. Find out about your options and what to look out for in the current environment…

What types of financial protection should I consider as a self-employed professional? 

Income Protection Insurance:   

Replaces part of your income if you are unable to work for a long period of time because of illness or disability: 

– You can insure up to 60% of your current income (salary and dividends)

– Your take-home payments will be tax-free, as the tax is paid on premiums

– A bespoke plan is built around your unique needs and budget 

Critical Illness Insurance: 

Pays out a lump sum if you’re diagnosed with a critical illness. You can use the pay-out for anything such as, to pay for medical treatment or to pay off your mortgage. 

Life Insurance: 

This will ensure your family is taken care of in the unfortunate event of something happening to you. 

Relevant Life Cover:   

This is a tax-efficient life insurance policy, allowing companies to offer a ‘death-in-service’ benefit to its employees and directors. It is set up by the company and pays out a tax-free, lump sum on the death (or diagnosis of a terminal illness) of the person insured. The proceeds go directly to the employee’s family or financial dependants. 

NEW:  Pre-existing Conditions Insurance: 

Two thirds of cancer sufferers have no protection at all.

1 in 6 type 2 diabetes sufferers and people who are medically obese, have no protection at all.

Managed Life Cover – bespoke cover for sufferers of type 2 diabetics and people with a high BMI.

Real Life Cover – Cover for people living with a serious medical or mental health condition – such as cancer, complex heart conditions, anxiety, alcohol dependency – that may lead to a decline from a standard plan. 

Do all types of protection insurances cover Coronavirus? 

Income protection will provide a monthly income if you are signed off work due to an accident or illness. Since most people recover from Coronavirus within 1-2 weeks, it is unlikely you will need to claim on the policy. In more serious cases, if you are still unable to work beyond your chosen waiting period, you will be covered until the normal terms of the plan. 

Life cover will also cover Coronavirus, unless you have already tested positive for coronavirus, have had symptoms or have been told to self-isolate.  In the latter case, you should only consider yourself to be self-isolating if: 

– medical staff have specifically advised them to do so 

– they’ve been advised to shield for 12 weeks due to being defined on medical grounds as being extremely vulnerable from Coronavirus

– they’re self-isolating due to symptoms they have or have tested positive for Coronavirus 

– they’re following guidance due to being in direct contact with someone who has symptoms (household isolation)

– they’re following guidance having recently returned from an affected area 

Critical illness does NOT cover Coronavirus in itself unless it results in a critical illness. Common signs of Coronavirus infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties which are mostly overcome. In more severe cases, infection can cause severe acute respiratory syndrome and kidney failure, which are then typically covered in a critical illness policy.   

What if I have or have had Covid 19 symptoms – can I still get cover? 

Yes, depending on the recency and severity of the condition. If you’ve recovered within the past month, they will postpone you until you have been free of symptoms for at least one month. 

As a Key Worker, can I still get cover? 

Absolutely.  All key worker will have access to the same protection, regardless of their type or place of work.  In addition, clients working in occupations covered by NHS sick pay but not directly employed by the NHS can also be covered. 

Will I need a medical to get cover? 

Not necessarily. We can advise our clients on how to set up cover without having to do a medical check so that they do not have to leave the home or see anyone from outside of their household but rest assured that any medical provider is taking all necessary precautions and your nurse would be in full PPE for the protection of everyone involved.  

Are premiums higher at the moment because of the pandemic?  

No, none of the providers we work with have increased their premiums in response to the pandemic. This could change in the future.

Why should I use a broker? 

Using a broker can be useful in helping you to fully assess your financial protection needs and ensure you get the best cover for your specific circumstances. At CMME, we work with a broad and diverse panel of protection providers, many of whom specialise in protection for self-employed professionals.


Speak to an expert today 

As one of the UK’s leading protection specialists for freelancers, contractors and the self-employed, CMME understands the way you work and can ensure that you have the appropriate financial protection in place for your current lifestyle and longer term needs. 

Whether you want to talk specifics or are just after some general advice, CMME can help.  Speak to them today on 01489 223 750 for a completely free, no obligation Protection Health Check, designed to assess your current level of financial security.     

Or click here to arrange a call back. 

Life is unpredictable but protecting yourself financially doesn’t have to be. 

Related topics

Contractor Guides Contractors