I read an article recently that said of all people in the workforce tradies are among the most likely to need life insurance but also least likely to have any cover in place. It got me thinking that there are actually a lot of people out there in a similar boat – I’m talking about people who are self-employed.
Don’t get me wrong, being your own boss can be a really wonderful thing (I should know)! But it also means you’re responsible for all the things that an employer typically takes care of on your behalf. Things like a regular salary, sick leave and even superannuation.
So what does this have to do with insurance? Well, here are some of the risks that could leave you and your family financially exposed at a time when you can least afford it.
1. No sick leave
Let’s start with an obvious one – no sick leave. So when you’re off work, you’re not getting paid. How long could you manage your household bills without your income coming in? An income protection policy is a great way to ensure you continue to receive an income even if you’re off work due to illness or injury. And premiums for income protection are usually tax deductible – bonus!
2. No business cashflow
If you’re self-employed and suddenly couldn’t work because of illness or industry, it’s not just risky for you and your family but also the future of your business.
Just like your household, your business probably receives its own steady stream of bills through the mail. Cash flow is a fairly common challenge for small businesses, so even if you have one or two employees that can bring in some dollars while you’re off work, you may not have enough to cover the ongoing expenses. The good news is that some insurers offer specific cover for this exact scenario. These policies tend to work a bit like an income protection policy, but for the business.
3. No long-term protection
Depending on the severity of your illness or injury, there could be a possibility that you will never be able to return to your business. Many small business owners rely on the sale of their business to fund their retirement. If you had to sell-off everything early, how long would you be able to manage? What about funding your medical bills? Would you end up having to sell your home as well? This is where life and total and permanent disability cover come in. These covers are specifically designed to help partners and families manage if the worst really should happen. Life and TPD can be funded through super, or as standalone policies outside super.
So if you’re self-employed, or planning on becoming your own boss, there’s definitely a lot more to think about than just where to find clients. But the good news is all you have to do is give me a call and I’ll help you work through your protection needs.