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Accident and sickness insurance for the self-employed

An accident and sickness insurance policy is available if you're self-employed – it can offer you financial protection on an ongoing weekly basis if you can't work due to illness or injury.

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What you need to know

  • Short-term cover that tends to only payout for up to 1 or 2 years.
  • You need to give the insurer details of your employment status, and the terms you are offered will differ from regular accident and sickness insurance.
  • A range of medical conditions will be excluded by these policies, such as pre-existing conditions, along with ones that may arise, like stress.

How does accident and sickness insurance work if I'm self-employed?

As a self-employed worker, there is little support for you to fall back on if you are seriously injured or become sick. Personal accident and sickness insurance offers protection to ensure you still receive an ongoing income.

  • It can provide income replacement that's paid each week. Or, at times, a lump sum. Cover can include accidental death, injury or disability.
  • There are different ways to get cover. You can tailor your policy to cover both personal accident and sickness, or just accidents only
  • No medical exams. Coverage can usually be put in place without having to undertake any medical or blood tests.

Key policy benefits self-employed workers should look out for

  • A safety net for self-employed workers. Self-employed workers don't get the same benefits from employers offered to other workers such as workers' comp, sick pay, holiday leave or long service benefits. If your business was to stop running, they could lose existing clients, be unable to cover their business overheads and have no stream of income to cover bills.
  • Peace of mind. As a self-employed person, things can be very unpredictable in terms of work and income. The last thing you want is to add to the problem by failing to protect your finances in the event that you can't work and earn due to an unexpected sickness or injury.
  • Choice of plans. You will find a great choice of personal accident illness insurance self-employed plans available from a number of providers, which means that you can boost the chances of finding the right plan for your needs whilst also staying within your maximum budget.
  • Choice of benefit. The benefit that is paid out in the event of a claim may be paid out in different ways. So, by choosing the right plan you can dictate whether you want the benefit as a lump-sum benefit or as an ongoing payment – note that weekly payments are most common.
  • Avoiding unnecessary financial troubles. If you weren't able to work due to sickness or injury, and you had no protection in place, you would really suffer financially, as you would have no way – other than dipping into any savings – to pay the bills, rent or mortgages, along with food bills and other essential costs.

What features should self-employed workers look out for?

There are some key features that you want to look out for personal accident insurance, including:

  • Premiums are tax-deductible: When you're in business for yourself an important aspect of everything you do is based around lowering your taxation at the end of each financial year and personal accident insurance can help you do this as the premium you pay for the cover is tax-deductible.
  • A lump sum benefit amount if you become permanently disabled: If you are seriously injured and become permanently disabled, you are entitled to receive a lump sum amount. However, this will affect the tax treatment of your premiums.
  • Benefit period: Applicants must assess what a suitable benefit period is for their situation. Generally, you can apply for a benefit period of up to 52 weeks.
  • Waiting period: The amount of time that the injured policyholder must be unable to work in order to receive a benefit payment, generally after 30 day excess period.
  • Policy exclusions:
    • Benefit payment is usually only provided for injuries that have been caused directly by an accident.
    • Injuries should be externally visible and if necessary, will be verified by a medical practitioner.
    • Accident policies will generally not cover the policyholders for any illnesses, dental injuries and injuries that have been caused by self-infliction or attempted suicide.
    • The injury will usually have to be within 60 days from the date the policyholder stopped work.

Frequently asked questions

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