June 7th 2018

3 questions to ask when protecting your income as a tradesperson

As a tradesperson, your services and skills are probably always high in demand, and bringing in a healthy income. But while things might be going well today, it’s vital you think about tomorrow.

Here are three questions you should ask yourself while business is going well to help you prepare for times when it isn’t:

1. Should I take out insurance?
At the risk of instilling gloom, you can take the greatest of care with your health and still meet with an accident or be diagnosed with an illness that takes you away from your work.

If you’re employed, you’re entitled to statutory pay for 28 weeks. At £92.05, this doesn’t even come close to the average household spend of £554.20 a week, according to 2017 figures from the Office of National Statistics.

And that’s assuming you’re employed. If you’re self-employed, you’re not entitled to Statutory Sick Pay but may qualify for Employment and Support Allowance.

There are a handful of insurance policies that are designed to take the pressure off, including income protection, mortgage repayment cover and accident, sickness and unemployment.

Consider the cost of the premium and whether your savings would be enough to tide you over.

2. Should I tell my insurer about existing conditions?
If you hold back on a pre-existing illness and your healthcare insurance provider receives a claim relating to the condition, they’ll almost certainly reject it. Don’t assume that you won’t be able to get insurance if you have had a health complaint either currently or one from which you’ve now recovered.

You can still get healthcare insurance, but the insurer may implement an exclusion period whereby you won’t be able to make a claim related to this condition. This is normally around 2-3 years. Don’t declare it and you could be wasting money on a policy which is not going to serve you when you need it.

3. What about the excess?
As with any policy, a higher excess means a lower premium. With products such as income protection and mortgage repayment, the excess relates to the number of days before you can begin claiming – which might be 30 or 60. Consider how you would afford to carry yourself and potentially any dependants in the time before your payments from the insurer start coming through.

If you have any concerns about your income flow and want to know how insurance can ease these worries, contact the Chartered brokers at Hine Insurance about the cover options available.