What happens if your ill?

[tony84]

On here most of us are self employed/run our own businesses or plan to.

That generally means you have no sick pay and so if you cant work, what happens?

The reason I am making this post is just a bit of a kick up the backside really. 2023 I was quite bad with long covid. I could still work, but I could only do a fraction of what I would normally do. I have an income protection policy, it was one I took out years ago. It would have only paid out £500 a month if I had needed to make a claim (costs me about £12 pm).

Once I was better and back on my feet, I did a top up policy for another £500 a month (increasing annually in line with inflation) - this also costs me about £12 pm). But the difference in getting the policy this time was that it was much more difficult, a lot more questions and all for such a small policy.

So... What happens if your ill?
The average claim varies from insurer to insurer but is around 6-8 years.
They pay out approx 90% of the time .


Take a look at income protection/PHI policies. Im not saying this because I sell them, I am saying it because I have seen what it is like to try and get a policy once things start going wrong. I pay £25pm and will get about a grand pm if I cant work. I wont be rich, but I wont be worrying about paying the bills. And with the way the benefits system is going, thats not something you want to be relying on.


This isnt meant to be a sales post. Just a nudge to say if you have been thinking about it, crack on because none us know when we will be sick.

 

[Frank the Insurance guy]

I would suggest this should be looked alongside some "back up" or disaster recovery plan.

Many self employed have connections with others in the same field. Worth putting a plan in place so that if you were ill and really couldn't work, that your connection would be able to field some of your ongoing and new work.

If you are ill and cannot do any work and so are earning nothing, it is better to pass on to a connection you trust and at least get an introducer or referral fee, to supplement any income protection/PHI insurance policy pay out.

 

[DontAsk]

Take a look at income protection/PHI policies. Im not saying this because I sell them, I am saying it because I have seen what it is like to try and get a policy once things start going wrong.

On average, they are worth far more than life insurance. You are far more likely to claim on PHI than you (or your heirs) are to claim on a life policy.

Do they reduce the payment if you are able to claim benefits? That would have happened with my ex-employers equivalent to PHI.

 

[Ozzy]

Wise words, and having spent quite a bit of time in hospital this year myself, something I've been thinking about.
I'm grateful that my business doesn't rely on me, so I'm a bit luckier, and due to a few years of declining health, I have found I'm pretty uninsurable. So my only real option, as I see it, is to sell my business.
If I'd taken out these insurance ~20 years ago when I was more sprightly, perhaps it would have been different.

 

[WaveJumper]

Great thread and advice, when I first started reading this, disaster recovery came to mind so hats off to @Frank the Insurance guy for raising this.

My only add to this would be on the latter topic make sure you can operate from a separate location, access all your data etc etc ........ its no good thinking about it after the building has burnt down

 

[tony84]

I would suggest this should be looked alongside some "back up" or disaster recovery plan.

Many self employed have connections with others in the same field. Worth putting a plan in place so that if you were ill and really couldn't work, that your connection would be able to field some of your ongoing and new work.

If you are ill and cannot do any work and so are earning nothing, it is better to pass on to a connection you trust and at least get an introducer or referral fee, to supplement any income protection/PHI insurance policy pay out.

This can help short term but small businesses - we not only do the work, we generate it too.
If you cant generate the work, at some point it will dry up.

I had brain fog (to the point where I stood in front of a kettle and the tea bags and forgot how to make a brew!). I had to have water instead. I also had difficulty breathing, so every breath was a deep one and it was hard work. - It all got better with a change in diet, covid gave me food allergies. But it took nearly a year to work it out.

I could deal with about 2 mortgages at any one time, I normally have around 5-10 on the go. I was referring cases off and relying on people to pay me what I was owed as I had no idea what I was doing. Its times like that you realise who you can and cant trust.

But all of that was before things like FCA reports, PII paperwork, accounts etc.

 

[WaveJumper]

Blimey I hope you well back on track now and its all behind you

 

[tony84]

Wise words, and having spent quite a bit of time in hospital this year myself, something I've been thinking about.
I'm grateful that my business doesn't rely on me, so I'm a bit luckier, and due to a few years of declining health, I have found I'm pretty uninsurable. So my only real option, as I see it, is to sell my business.
If I'd taken out these insurance ~20 years ago when I was more sprightly, perhaps it would have been different.

I sell the stuff and the only reason I took out my original policy (hence why it was so small) was because my daughter was in and out of hospital when she was born.

The policy I took out had something called Best Drs included where you can send your medical reports to get another opinion on the diagnosis and treatment. Had it not been for that, I would not have had anything as I am generally in good health.

Before covid I used to go to the gym 3 times a week, never smoked, bob on for BMI and was only really having 2-3 drinks a week as my party days were just about stopping.

I never in a million years expected to become ill.

 

[tony84]

Blimey I hope you well back on track now and its all behind you

Brain fog has gone. Breathing is about 95%+ back to normal now. It was all down to inflammation which was caused by food allergies I picked up from covid.

The only thing I cant do is eat out (because I am now officially THAT awkward person haha) or go to the gym. I can do some small, light weights at home though and play golf so compared to where I was all is good.

And work wise, my brain is like a sponge again and 100% back to normal.

 

[DontAsk]

So my only real option, as I see it, is to sell my business.

Errr, didn't you try that once before

 

[Gecko001]

If you are self-employed, you may be able to get benefits such as Universal Credit, or Employment Support Allowance when sick.

 

[Ozzy]

Errr, didn't you try that once before

A few times