Freelancers Insurance? UK Income Protection Quote > 15 secs 2025

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Freelancers Insurance for Income Protection

Sick pay for self employed. Income Insurance Quotes. Broker help

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Am I Self Employed or Employed Freelancer?

Firstly, how do you work actually out if you are truly classed as either freelance self employed or employed ?

Well, if you run your own freelance business then HMRC classify you as self employed for tax or sick pay benefits purposes as follows:

• Run your business for yourself plus then take responsibility for its success or failure
• Have several customers at anyone period of time
• Can decide how, when and where you do your own work
• May hire in other people at your own cost to either help you or to do the work for you
• Provide the main items of equipment to do your own work
• Are responsible for finishing any unsatisfactory work in your own time
• Charge any agreed fixed prices for your work
• Sell your goods or services to make a profit

Self employed status for any freelancer business purposes - could mean operating either as a Sole Trader, Limited Company director or be in a Partnership.

Some people are sometimes told they are self employed by the people who are engaging their freelance services...when they should actually be classed as workers or employees.

Also, you can be both employed and self-employed at the same time

For example - you work for an employer during the daytime, then run your own freelancers hairdressing business in the evenings, so need freelance hair stylist insurance.

'Freelancer Insurance Income Protection' | Statutory Sickpay?

You may not able to get Statutory Sick Pay State benefits for being self employed (unlike if you were employed) if your sole Freelancer work contracts doesn't entitle you any employee benefits.

If you are temporarily or longer term unable to work due to illness, you should therefore check instead if you are eligible for the Govt (ESA) Employment and Support Allowance

To qualify for any ESA benefits, you need to have made enough regular national insurance contributions.

Check out what state benefits you could claim: but the reality is any benefits are likely to be around £100 per week ie; probably much less than your current self employed income ?

In Pandemic 2020's times, this issue was at the forefront of many peoples minds ie; Can you get sickness pay if your a sole freelancer? What happens to myself, my family or business if I am off sick from work ?

Freelancers insurance? You are working for yourself, so the buck now stops with you, as you are your own boss !

Freelancers Insurance Income Protection & National Insurance?

If you are self employed Freelance contractor, you are also then responsible for paying your own self employed national insurance contributions. You will usually pay Class 2 national insurance contributions (NICs) and if you earn above a certain amount, you will also have to pay Class 4 NICs.

To also fully qualify for any limited Government benefits could mean you need to have been trading for at least 2 years or have met National Insurance conditions for 2 tax years. Use our National Insurance calculator below.

Special NI rules for Specific Freelance jobs

Some self-employed Freelancers - they do not pay National Insurance through their Self Assessment, but may choose to pay voluntary contributions. These are:

• examiners, moderators, invigilators and people who set exam questions
• people who run businesses involving land or property
• ministers of religion who do not receive a salary or stipend
• people who make investments for themselves or others - but not as a business and without getting a fee or commission

Freelancer Insurance Sick Pay Self Employed

Being your own boss now may give you freedom & flexibility. However, being a self employed freelancer - also means that any unforeseen business problems concerning sick pay, as it now falls onto your own 2 shoulders.

If previously employed, the switch to self-employment freelancer also means losing any employee benefits & protection cover. Benefits that you may have taken for granted before. So self employed insurance is now your own responsibility.

Sick Pay Insurance for Freelancers

With no death-in-service benefits, no sickpay, no holiday entitlements or no pensions it’s important that any self-employed Freelancers considers getting their own insurance back up plan.

Let's have a look therefore at what your other options are available for claiming un paid sickness pay for self employed Income Protection Insurance Freelancer >>

'Sickness Freelance Insurance Self Employed'

When you’re self-employed, generally most people do not earn the exact same regular amount monthly ie; your income fluctuates. It therefore becomes harder to predict your cash flows.

A cash flow forecast tells you about the outlook of your self employed business. It enables to help prepare for what lies ahead and how your business is going to perform in the future ie; Like you would go into the Dragon's Den on BBC asking for money for your business idea.

Part of this cash flow forecast process should also be what happens if I am off work ill ? What happens when your all right forecast, suddenly goes all wrong ! ie; your Plan B or 'Sickness Insurance Self Employed' back up plan.

'Income Protection Insurance for Self Employed Freelancers'

Many self employed people therefore use a Income Protection policy as their 'Back Up Plan B' ie; a 'paid sickness' reserve fund to protect their earnings if ever off work through illness.

Income Insurance protection for freelancers could help you to cover:

• Regular Bills
• Mortgage or Rental payments
• Ongoing Living costs
• Credit Cards or Loans

Calculate PHI Insurance re Sickness as Freelancers?

Most Uk Insurers generally base their income protection plan benefits or paid sickness policy on your self employed 'before income tax' profits.

In claim, this could be calculated on the previous 12 months or average 3 years turnover before you became incapacitated. The Insurers look to 'pre-tax profits' from your trade, profession or vocation after trading expenses ie; 'Net Profits'.

So, if your self employed business gross turnover is say £100,000 but your expenses are a massive £75,000 - then your net profits are £25,000 ie; this is the figure the Insurers would use to calculate your income from. Or alternatively, what you submitted to HMRC under self-assessment tax rules.

Some Insurers average the last three years net profits rather than just the most recent trading year on any 'income protection for the self employed' clients. Therefore, it does mean if you are just setting up your business, you may not have a financial track record accounts as yet to submit to HMRC.

Don't worry, several Insurers will allow you take out cover for upto £1,000pm income guarantee, if you can justify you are working more than a set numbers of freelancing hours to qualify for their cover.

How does Income Protection PHI work?

Income protection insurance works by paying out an agreed percentage % of your usual self employed Freelancers income if you are unable to work because of injury or illness ie; It is your sick pay back-up plan.

Typical Key Features

• Designed to pay out  100% Tax Free Income to cover your lost freelance income
• Usually has an initial waiting or deferred / waiting period from 1/4/8/13/26/52 weeks 
• During Pandemic 2020's, some Insurers removed their shorter deferral periods
• PHI benefits are currently paid out tax free on claim until you return to work or plan end date
• Insurers Plans can usually run upto state pension ages or some upto age 70
• Insurance for sickness self employed may be level or inflation linked from outset or claim
• Medical evidence is usually required for underwritten insurance before any terms offered
• Cover can be based on maximum of say upto 65/70% of your annual taxable earnings
• Calculations then will be based on any lower 'net profits' when self-employed
• Waiver of Premium so you don't have to pay premiums during un paid sickness claim
• Death benefits (if included) may just mean a lump sum sufficient for funeral costs or return of some premiums

Note: Insurers will also need you to either proove your income (as you cannot be better off sick than well) or request that you were working more than a set numbers of hours to qualify for cover.

During Pandemic 2020's, some Insurers removed their shorter 1 day / 1 week deferral periods re increased costs. Note: Income protection insurance is not the same as ASU or payment protection insurance (PPI).

2 Types of Income Insurance: For Freelancers

*Comprehensive Income Cover

• Covers you until you either go back to work ...or maybe never go back to work
• Protects you on an 'own occupation basis'
• Premiums may be fixed none-reviewable
• Proportionate benefit covers lower income re job change caused by illness or accident

*Budget Income Cover

• Budget cover may only payout per claim for upto say 12 | 24 | 60 months (ie; limited term)
• Premiums may be annually age costed / 5 yearly reviewable
• Invariably this type of plan is initially alot cheaper but will cost more into the future

Insurance Freelancers PHI | Underwriting & Health Issues

You pay a monthly premium throughout the term of the "Income PHI Insurance" policy. Costs for PHI cover depends mainly on:

# Your Age - at the time you start the policy ie; older people are more likely to suffer an illness, so pay more
# Your Gender - being male or female no longer affects rates wef 2012 via income providers
# Your Health - at the time you start the policy. If your health is poor eg; raised BMI kg, blood pressure or cholesterol  you may have to pay more, have exclusions or even be refused sickness cover
# Your Occupation - some self employed jobs are more likely than others to contribute towards illness
# Hobbies and lifestyle - for example, rock climbing is high risk, so you'll pay more
# Smoker Status - for example, smoking makes you more likely to make a claim, so you'll pay more than a none smoker
# Waiting period - once you claim, there is a delay before payments start

You can choose how long this 'wait period' is eg; from 4 weeks and maybe also dependant upon your freelancers occupation. Also, you may have a savings net to fall back on anyway short term ?

The longer this waiting period, eg; 13 weeks, the less monthly premium you pay.

*2 main types of underwriting assessment options

1. No Financial assessments: Insurers will NOT require sight of your annual income confirmation, but will typically limit coverage upto £1,500pm tax free. Usually paid say for 1/2 years maximum per claim - to help cover your bills & things.
2. Financial assessments: Insurers or brokers WILL require sight of your annual income confirmation via PAYE wage slips or P60 (either upfront but certainly at claim). You may have option to lock a certain amount of coverage levels at outset.

'Freelancers Insurance UK' Income Protection Costs?

Well, what does 'Freelancers Income Protection' cost - that's the million pound question! 

For example, if you earned say £30,000pa gross and then worked for the next 35 years until retirement, you could potentially earn over £1 million gross ie; £30,000pa x 35 years [or more with any future inflation wage rises].

As such, feel free to do you own self employed income protection quote - to then value what your self employed freelance income is worth to your family lifestyle and bills if off sick ?

• The cost of average Car Insurance bill is @ £40pm
• The cost of average Mobile Phone bill is @ £45pm
• The cost of average Broadband Package bill is @ £44pm
• The cost of average Fuel and Gas Electric bill is @ £100+pm

What's Martin Lewis say on Freelancers Insurance re Income Protection?

Firstly, if reviewing MSE Martin Lewis on Illness Insurance types, he says it's not just the bricks & mortar that keeps the roof over your head, but 💯 100% your ability to repay the mortgage, bills or rent a property.

So if you unfortunately fell critically ill long term or had a serious accident, perhaps urgently need a major operation privately - ALL threatening your health, ongoing income and lifestyle - maybe going into debt or even worse bankruptcy.

If falling behind on those regular monthly bills re illness also, Martin notes will then damage your credit record history file.

Then you're at real risk of being 'in arrears' – something that puts you at high risk Martin points out of either losing your home by 'repossession' or perhaps served with an eviction notice. 

Worst case and the bottom line is he sadly remarks - then be forced to sell-up to repay your Mortgage Lender or alternatively forced to move from the rental property.

BUT Money Saving Expert also says 'Do bear in mind there is no legal requirement to insure your monthly payments' or cover your health - BUT caveats that any Government financial benefits for illness support like PIP is often limited.

The Money Expert doesn't go into the specifics of employment types but Martin Lewis comments on the value of having income protection insurance - freelance or not.

Martin Lewis concludes that it may cover all your essential monthly spending if you're unable to work due to illness or disability for a set period (generally a year or two). 

Unsure here if he means the income protection policy only covers you for a year or two (which some cheaper plans do)... or you are off sick from freelance work for a year or two.

The MoneySavingExpert also says that income protection insurance generally includes a greater range of illnesses than critical illness cover, but can be more expensive. 

What happens when I return to Freelance work after a claim?

• Policy monthly benefits stop after you go back to your normal job or agency work, as will any premium waiver
• This sick pay when self employed insurance plan is still active & you will continue to pay your premiums
• Some Insurers may then pay a reduced or proportional benefit if you cannot do exactly what job you were doing before
• This takes account of any earnings loss or reduction due to your illness or injury affecting family life
• It could be you are in a different occupation also because of your incapacity. Or have to do reduced work hours or restricted your duties.
• Note: there is usually no limit to the number of claims you can make during your working life

How much for Carers Allowance?

If you are now off work sick, and claiming on your income protection, check your plans T&C's if this may affect any government alllowances.

Also your family or support may now ask 'are they entitled to claim any government benefits to help look after you'?

Potentially yes, but only if they currently provide more than 35 hours per week (or more than 5 hours per day average) full-time support or care ie; How much for Carers Allowance?

This support may include: Assistance with your personal care, including dressing & bathing. Supporting also with taking medication or taking them to any health related appointments.

As such, benefits typically may only be just over £75pw ie; over £330pm. Note: If also getting any universal credits and carers allowance benefits maybe then affected.

Sick Pay Self Employment Freelancer - Claim Risks

Freelancers & Critical Illness cover instead? 

What about considering critical illness cover instead, as your self employed freelancer insurance policy back-up?

Critical illness cover pays out a tax-free sum if you are diagnosed with various life-threatening conditions eg; specified cancer, heart attack, stroke, ms etc; as listed in the policy.

For some, critical illness cover for self employed is a different alternative to Income Insurance, as Critical Illness gives Lump Sums or Family Income Benefits options.

But there are lots of common situations when it would not pay out. For example, if you had back problems or maybe a stress-related illness.

Note: that not all occurrences of the critical illnesses listed by insurers are covered. For example, some lesser forms / early stages of cancer maybe not covered by some insurers policies.

Lifecover and critical illness cover should also not be confused with terminal illness. Terminal illness benefit is usually automatically included within a life insurance policy and means you will not survive, as you cannot be cured.

'Freelancers & Life Insurance'

Like sick pay when self employed, the same rule applies for Freelancers and life insurance, it is now also down to you... So, how much life cover should I have?

On their Money Saving Expert Life Insurance website, Martin Lewis on Life Insurance says for a good rule of thumb, his Best formula is ‘THE 10 x RULE’ ie; aim to cover 10 x the Annual income of the main breadwinner or highest earner until any kids have finished full-time education. 

So, in this Martin Lewis formula if your frellance earnings were say £32,500pa - then he says maybe consider family life insurance sum for at least 10 x gross salary = £325,000 to insure yourself for (after any mortgages, loans & debts are repaid ie; consider protection cover for them seperately)

BUT following on from this simple self employed Life Insurance coverage example formula, if you earned say £32,500pa then worked for the next 30+ years until retirement, you could potentially earn over £1 million gross ie; £32,500pa x 30 + years [or more with any future inflation wage rises].

Apart from losing a loved one & family breadwinner, this real hidden income threat is what could be lost if the main earner died prematurely. 

Income Protection Insurance For Freelancers UK | Conclusion

Ideally you should have both income protection, life insurance & critical illness if your budget allows this and dependant upon your own situation as a freelancer.

For more information on sickness insurance re freelancers & costs > get a quote | & talk to our professional brokers here for best advice.

Article on 'UK Freelancer Insurance Income Protection' by Martyn Spencer Financial Adviser (2025)

For reassurance re health for men & women - we review many of the best brands selling Income Protection & Life Insurance in UK (inc NI)