Insuring yourself against illness??

Log in to reply
estwig

estwig

Free Member
Sep 29, 2006
13,071
4,830
in the cloud
  • #1
    Do any of you good business people, either self-employed or company directors, have insurance against being ill??

    I have been ill and haven't earned, or done anything all week, for what is probably the first time in my life. I have a stomach ulcer and a chest infection, medicine has the ulcer under control and pain killers are keeping the chest infection at bay, until x-ray results are in. The doctor offered me a 'sick note', but it ain't much use to me.

    If anyone has insurance to pay sick pay, it would be interesting to hear from you.

    How much does it cost??

    How much does it pay out??

    How does it work when as a director my salary is very small and made up by dividends.


    Any thoughts on something that must effect a lot of us, would be helpful.
     
    R

    ryansrs1

  • #6
    Defo get it sorted. I recently (well several months ago now) broke my ankle and it buggerd me right up. Am going to see if i can add it on to my business insurance (public liablity) as you never know whats around the courner-as for general illnesses or non life threatening illnesses im not sure. Due to chat to insurance this week so will post what i find out.

    Get well soon mate.

    J
     
    • Like
    Reactions: estwig
    Upvote 0
    M

    Matt1959

    Free Member
    Sep 8, 2006
    6,325
    1,225
  • #7
    Keith, When I was off 3.5 months, I was able to claim on a friendly society policy. I took this out in about 1987 and its costing me £30.60pcm at age 50 (it goes up every 10 years or so - due to increase soon, I would say to about £42pcm.) This policy paid me £102 per week deferred one week when I was ill so made a difference to income during that period. As far as I'm aware, this policy would carry on paying £102 until I was back at work whenever that was. The difference between a friendly society and a for profit insurance company is that the former re invests profits for members - to this end, if I bailed out of membership, I'd get a cheque for about £2500 as part of the contributions go into a fund that grows for the policy holder.

    £102 a week is sod all with the cost of living these days and in no way compensates for a wage but its better than nothing. If you couple this with £50.60pw sickness benefit and perhaps a couple months of mortage holiday, its just about enough to keep the wolfy from the door:)

    pm me if you want any more, more personal info

    Can't help thinking this subject is head in the sand stuff for the majority of self employed but would love to be proved wrong here...

    edit. sorry Keith, I forgot to add the get well thing - all the best..
     
    Last edited:
    • Like
    Reactions: estwig
    Upvote 0
    S

    spigwell

  • #8
    Most insurance companies do this.

    I have a policy with HSA for the key employee, where if something happens to me and I am off work for a period of time we would get payments into our account. You can get this type of policy for any key employee including yourself. It also has to go through the business.
    I think we are covered for something in the region of £50k PA renewable for 12 months on anniversary for £25. I am sorry I dont remember how much it costs per month I have the figure of £135 pm in my mind but can't be certain until I check, I will look it up over the next few days and PM you the details.

    Hope you are on the mend soon.
    Gary
     
    • Like
    Reactions: estwig
    Upvote 0
    S

    spigwell

  • #11
    Matt1959 said:
    people think it could never happen to them (no ref. to OP btw) imagine if you had a stroke and could never work again - doesnt bear thinking about......or do you just cross your fingers and hope for the best:|
    Click to expand...

    Absolutely correct.

    Another good one to take out is critical cover. In the event of being DIAGNOSED with a critical illness (doesn't need to be a terminal one) you get paid out a lump sum, I have that also, I think it is with AXA.

    Gary
     
    Upvote 0
    A

    Adam T

    Free Member
    Aug 10, 2009
    109
    13
  • #12
    Hi all,

    Firstly OP I wish you a speedy recovery. I think we sometimes forget just how much our businesses are still driven by us day in day out, and am aware that is not a good thing.

    In terms of insurance there is a strict difference between personal protection and business protection.

    Personal Protection

    These are usually bought in line with your mortgage, or at a bank direct. Typically their is Life, which is simply your life covered for £x with a term of x costing x per month. Conventional wisdom is that this usually covers a mortgage as a minimum and sometimes family protection.

    The diagnosis of a Critical Illness works on the same principle but is obviously more expensive as this is more likely during the term of your protection. As noted earlier this is not terminal but ordinarily includes Cancer, loss of multiple limbs, strokes, heart surgery (not a good list but around 50 conditions)

    The muddier water is what the OP is referring to; Mortgage Repayments Cover (MRC) is usually sold alongside a mortgage and covers 125% of your mortgage payments for Accidents, Sickness and Unemployment (ASU)
    This will be for a fixed term and usually for 12 or 24 months. Again this policy can be expensive in the current climate and is widely available.

    Many providers also provide Income Protection which was referred to earlier. This only covers Accident and Sickness usually, although the terms can run until retirement age (rather than only 1 to 2 years as above) and has a deferred starting position between 1 and 13 weeks usually. This is usually cheaper as Unemployment cover brings the price up, especially on the self employed/business owners.

    Income Protection can be a lot more flexible and takes into consideration dividends and salary as a total package and can have higher monthly payouts in the event of a claim, so long as honest declarations made on income.

    On the other side there is business insurance. As noted earlier this is paid through the business, to protect the business. We have been getting involved in more and more of this recently as many businesses are not adequately covered.

    There are two main groups, the first being key man cover. Basically you can insure the life of a key man in the business. This can include yourselves in some policies. Effectively if any insured person died in service, the business would receive the amount the key person was valued at in order to replace, re-train, re-skill etc.

    The second is Shareholder protection. To give an example my business is a partnership of 2 persons (1 being me) and within our company formation if I was to die my share would transfer to the Mrs. However the Mrs is not qualified, nor has industry knowledge or skill set to be able to maintain the level of business. We therefore pay a premium each month (not silly money either) so that if I die in the next 25 years, the business will receive a payout of £x to which we have a legal document that my partner will pay my Mrs to transfer her share to him, advantaging the business so he can employ someone, seek a new partner without crippling the business.

    I am really sorry for the length, I actually wanted to be concise but the words flowed.

    However before I get a barrage of mails saying you can get this and that and the other. These days Insurance can be so flexible if you go to the right places, you can pretty much tailor your requirements and budget to find a suitable product.

    There is also lots of regulation in here (tried to get to the point) so not all situations are individual and bespoke and certainly not all of these products will be right for all businesses/individuals.



    Adam
     
    • Like
    Reactions: papverpoppies
    Upvote 0
    S

    spigwell

  • #13
    PHI is the one I think you are looking for.

    Found this on the interwebbie thing it gives a good explaination of what it is.
    Permanent Health Insurance (PHI) As its name suggests Permanent health Insurance is a contract designed to provide long-term income protection up to your chosen retirement age. There is usually a waiting period which you choose at the start of the plan before benefits will be paid (4-week, 13-week, 26-week, 52-week or 104-week). Providers also limit the amount of cover you can have and is normally 50% of your annual earnings (benefits are paid tax free in a claim).
    It is important that you ensure that you don't have cover which overlaps over policies and also any employer support, otherwise you are paying for cover you don't need and cannot claim.
    The level of premium for the required amount of cover will depend on the type of plan and the company chosen. Some companies offer guaranteed fixed premiums, other plans reserve the right to review premium levels, whilst others offer the potential to build up a surrender value. For a slightly higher premium the option is normally available to have the level of cover automatically increased each year in order to provide protection against the effects of inflation.
    Providers will also offer different disability occupation definitions, which are used when you make a claim. This is an important aspect of the plan. The most comprehensive definition is OWN OCCUPATION (claim paid if you are unable to do your own occupation). This is clearly preferable to a definition of disability that requires the inability to carry out any occupation.
    Other Definitions:-
    Any Suitable Occupation - A claim can be considered should you become unable to do your own occupation or any occupation to which you are suited, by training or experience. This is clearly preferable to a definition of disability that requires the inability to carry out any occupation.
    What options can you choose with Permanent Health Insurance?
    Waiting period(s) before you can make a claim:-
    4-week, 13-week, 26-week, 52-week or 104-week
    Age when policy expires:-
    Age 50+
    Indexed Benefits:-
    In order that the level of benefits in payment are protected against the effects of inflation in the event of a claim, these should be indexed by percentage or the rate of inflation.
    Indexed Cover:-
    In order to provide some protection against the effects of inflation, the level of cover automatically rises by a percentage you choose per annum or by the rate of inflation.


    More info regarding other types that have been mentioned can be found at

    http://www.quoteme4.co.uk/html/faq.php#phi

    Hope this helps a little.
    Gary
     
    Upvote 0
    I

    Insurance Consultant

    Free Member
    Sep 30, 2009
    6
    0
    London
  • #15
    Yes there are insurance policies which pay monthly income incase a person cannot work due to accident or sickness, it pays out the monthly amount depending on the policy benefit selected.

    The eligibilty is 50% of Gross salary for a year divided by 12...

    In your case as your a director and get salary, would be 50% of your annual declared income divided by 12 months... would be your benefit

    To claim, condition is that if you can't work for 5 days due to accident or sickness you can make a claim and claim will be paid from the very 1st day of accident or sickness.

    Insurance premium works on age and amount of benefit, hence exact amount can't be given here.

    I work as a insurance consultant and we have a product called Income Protection which would work perfect for you

    Plus we also cover Accident Protection, Life Protection (Critical Illness / Life & Critical Illness) very comprehensive covers

    I can certainly guide you on this.
     
    Last edited:
    Upvote 0

  • #16
    The only people who will insure me are the undertakers.:eek:

    Having had 2 heart by-passes and having been told the NHS will not operate again owing to at my age not being a viable cost effective proposition.:|

    I have a little tucked under the matress to pay for me own bleeding op.;)

    Never trust those rotten insurance companies,cash is king.:)

    Earl
     
    Upvote 0
    T

    Techy

  • #18
    Estwig,

    I'm an engineer and not part of the insurance con-merchants :eek:

    What you are after is either short / long-term illness cover, which you can get at different prices via most insurance companies

    Keyman Cover (Relatively Short Term Illness)
    - About 75% of your wages gets paid to you after 4 / 6weeks of illness, plus your salary is paid to someone else to take over whilst your off

    Critical Illness / Life Assurance (Long Term Illness / Death)
    - Payout if you are severly ill / die (god forbidding)

    I have both, but the Keyman Cover is (in reality) useless for the 'main person' as you will never get someone to replace you (with your commitment / experience) to cover your actual duties (get work, deliver it, look after the business, make tea and tidy up etc) at your salary

    Keyman Cover costs (a 40yr odd person) about £80 p/m (£40k p/y for a replacement + about 75% payment of salary)

    Critical Illness / Life Assurance costs (a 40yr odd person) about £80 p/m (£250k payout)

    Critical Illness is essential to sort the family long-term

    Keyman Cover could be a saving pot as it's unlikely you will be off semi-long term every 5yrs, which equates to £4800 (£80 x 12m x 5y). If you took this cover for the next 10yrs and weren't off, you would be throwing away almost £10k

    Looking at Keyman from this perspective, I'm off to cancel my policy and put the £80 p/m (I have been paying for +5yrs) into savings account :mad:
     
    • Like
    Reactions: sirearl and Noah
    Upvote 0
    Noah

    Noah

    Free Member
    Sep 1, 2009
    1,252
    314
  • #19
    Techy said:
    I have both, but the Keyman Cover is (in reality) useless for the 'main person' as you will never get someone to replace you (with your commitment / experience) to cover your actual duties (get work, deliver it, look after the business, make tea and tidy up etc) at your salary
    Click to expand...
    Good point, but maybe Keyman Cover works in a slightly less drastic situation: for example, my role is physical as well as mental, and if I was physically incapacitated but still able to communicate I could certainly use that physical replacement - we would probably stagger along until I was recovered, but the alternative would be going bust. Still need to evaluate if the cost is worth the cover.
     
    Upvote 0
    I

    Insurance Consultant

    Free Member
    Sep 30, 2009
    6
    0
    London
  • #20
    Yes there are insurance policies which pay monthly income incase a person cannot work due to accident or sickness, it pays out the monthly amount depending on the policy benefit selected.

    The eligibilty is 50% of Gross salary for a year divided by 12...

    In your case as your a director and get salary, would be 50% of your annual declared income divided by 12 months... would be your benefit

    To claim, condition is that if you can't work for 5 days due to accident or sickness you can make a claim and claim will be paid from the very 1st day of accident or sickness.

    Insurance premium works on age and amount of benefit, hence exact amount can't be given here.

    I work as a insurance consultant and we have a product called Income Protection which would work perfect for you

    Plus we also cover Accident Protection, Life Protection (Critical Illness / Life & Critical Illness) very comprehensive covers

    I can certainly guide you on this.
     
    Upvote 0

  • #21
    Right..whats all this talk of Life Insurance when Bob is only feeling a little unwell?

    I used to have all these type of insurances, but once I got rid of a wife, I dumped all the insurances too (thinking I'l handle things myself, and having no dependants).

    It is a difficult one, and I had a rethink in January, when I picked up a shocking Flu (thought that booger had my measure for a few days, during the hallucination period lol). It lasted nearly 2 weeks, most of which I was unable to work at all. Luckily I had someone who I could take the urgent stuff to and he sorted it out for me, and my clients were very understanding (once they saw me, and the colour of me, they realised I was not jesting).

    It is a problem though, and my tactics are just to have some 'other arrangements' in place. A new member of staff will be trained up on handling the clients, and another firm who I am friendly with in another town will handle the actual work, since I can trust them not to steal my clients.

    If I die, I don't really give a stuff about the work side tbh, but I would want all my clients to be handled by someone who is gonna look after them, so those arrangements are already there.


    EDIT..... forgot to say.... Get Well Soon fellah !!
     
    Last edited:
    • Like
    Reactions: estwig
    Upvote 0
    estwig

    estwig

    Free Member
    Sep 29, 2006
    13,071
    4,830
    in the cloud
  • #23
    I am gonna stick with the same plan I have had for years, keep some cold, hard cash tucked away, just in case.

    I'm not a big fan of insurance anyway, a lot of it, beyond house contents and building insurance, is a con, sold on peoples fear of the unknown. You can waste massive amounts of money, insuring yourself for things that will probably never happen.

    Thank you for everyone's input, it is an interesting subject.
     
    Upvote 0

  • #24
    estwig said:
    I am gonna stick with the same plan I have had for years, keep some cold, hard cash tucked away, just in case.

    I'm not a big fan of insurance anyway, a lot of it, beyond house contents and building insurance, is a con, sold on peoples fear of the unknown. You can waste massive amounts of money, insuring yourself for things that will probably never happen.

    Thank you for everyone's input, it is an interesting subject.
    Click to expand...

    I am with you on this Keith,remembering that in the UK we are supposed to have a NHS which is supposed to be our health insurance paid for by us all.:|

    The bit of cash is for the things it won't do or not in a time scale that is acceptable.

    I mean what other business is there ,where the business owner gets to chose what the customer gets.?;)

    Having said that not everyone can accumulate a bit of cash ,so insurance may have a part to play.

    Earl
     
    • Like
    Reactions: estwig
    Upvote 0
    I

    If Only

    Free Member
    May 24, 2009
    32
    2
  • #25
    This is a very dangerous topic to discuss on a public forum.

    I used to be a financial advisor and I can tell you that a lot of what has been said has been utter rubbish and a lot has been correct. In many replies there has been a combination of the two.

    I understand the anti-financial services feelings but it is such a minefield that anyone requiring cover really needs to speak to an Independent Financial Advisor.

    With regard to the original poster Income Protection is required. However, once again, he would need to speak to an advisor. Premiums would depend on many things ie. deferred period, benefit required, nature of occupation, escalating or flat benefits, medical history, smoker or non smoker, etc. The maximum benefit would be a percentage of the applicants net profit.
     
    Upvote 0
    M

    Matt1959

    Free Member
    Sep 8, 2006
    6,325
    1,225
  • #30
    worth bearing in mind theres illness and illness. Its one thing being a few months off work and quite another having a stroke and never being able to work again. For the latter, I think insurance is a good idea as you'd have to have hell of a size bed to store enough cash to cover that eventuality;)
     
    Upvote 0
    KidsBeeHappy

    KidsBeeHappy

    Free Member
    Oct 9, 2007
    7,371
    1,573
    Sunny Troon
  • #31
    Everyone knows that it's only the employed people that get sick (an the unemployed who can be permanently sick). The self employed don't get sick, as they don't have the benefit of sick pay, or knowing that someone else will somehow cover their work, or the safety that knowing that the goverment are going to hand out benefits until they decide that they want to go back to work.

    And by "sick". I mean that stuff that loses the UK vast amount of working days each year, not strokes, heart attacks and cancer, but colds, "flu", stomach ache, and the other stuff.
     
    Last edited:
    Upvote 0

  • #32
    Boxby said:
    Everyone knows that it's only the employed people that get sick (an the unemployed who can be permanently sick). The self employed don't get sick, as they don't have the benefit of sick pay, or knowing that someone else will somehow cover their work, or the safety that knowing that the goverment are going to hand out benefits until they decide that they want to go back to work.

    And by "sick". I mean that stuff that loses the UK vast amount of working days each year, not strokes, heart attacks and cancer, but colds, "flu", stomach ache, and the other stuff.
    Click to expand...

    This is life not a bleeding great factory.

    Work is just something the button pushers have worked out gives them the best return.:)

    Remember not all societies work,they have more sense.;)

    Earl
     
    Upvote 0
    KidsBeeHappy

    KidsBeeHappy

    Free Member
    Oct 9, 2007
    7,371
    1,573
    Sunny Troon
  • #36
    sirearl said:
    your just envious.:D

    Earl
    Click to expand...

    tbh, this week, i probably am!!

    I've just watched a bloke that's spent his entire life on the dole and hasn't done more than a months paid work since he left school, move into a brand new (housing association) house, which he's already got a whole heap of rubbish piled up outside. I've seen him have new carpets fitted, laminate flooring, he's had the drive monoblocked, and is running his lights 24/7 so is obviously not worried about the electric bill. Watching the furniture lorries come and go with deliveries of new stuff, and am basically sitting here wondering "why bother!"
     
    Upvote 0

  • #37
    Boxby said:
    tbh, this week, i probably am!!

    I've just watched a bloke that's spent his entire life on the dole and hasn't done more than a months paid work since he left school, move into a brand new (housing association) house, which he's already got a whole heap of rubbish piled up outside. I've seen him have new carpets fitted, laminate flooring, he's had the drive monoblocked, and is running his lights 24/7 so is obviously not worried about the electric bill. Watching the furniture lorries come and go with deliveries of new stuff, and am basically sitting here wondering "why bother!"
    Click to expand...

    Afraid its an ongoing problem in our society when the benefits of working are not as great as the benefits of not working or the margin between doing 40 hours or zero is to small.?

    Earl
     
    Upvote 0
    M

    MK Financial Solutions

  • #38
    On personal side, you have two options :-

    1- PHI, where you are insured against not being able to work due to illness /accident etc (not redundancy) and it pays you monthly income up to the retirement age. They will not change the terms of the policy etc irrespective of how many claims you make, there is no limit on number of claims.

    2- Life Style cover, similar with a bit of unemployment cover, pays benefits for the for 5 years (in the life time of the policy).

    For business, you can get a key person cover where the insurance will cover the payment to the sick person plus the cost of employing someone in the similar role to make sure company does not lose revenue. Unfortunately, this is not available to sole traders.

    For all these, insurance companies might not ask for the proof of income when you take the cover, but when paying the benefits, they would want to see the accounts / proof etc.
     
    Last edited by a moderator:
    • Like
    Reactions: estwig
    Upvote 0
    Log in to reply

    Latest Articles

    Join UK Business Forums for free business advice
    Top Bottom
    Community
    Articles
    Menu