The Importance of Protection Insurance Cover for the Self Employed

In In The Press by PCH Staff

Anyone who works for themselves, runs a small business or who holds a senior role within a company where their absence could materially affect that business moving forward should be aware of the importance of being able to go to work and be productive consistently on a long term basis. Put simply, their health and its on-going maintenance is as important a factor as their work skills, knowledge, client relationships, management capability or training.

Our health though is something that many of us tend to take for granted. However, it is vital to think again : what if your continued health is mission critical to your maintaining your income – what factors do you need to consider?

Short Term Illness

You don’t need to peruse the newspapers, watch TV news reports or visit on-line news sites for very long to find stories about the NHS and both its wonderful capability to support us but also unfortunately its shortcomings. Whether we like it or not, for some conditions there are serious issues around the speed and availability of consultations, diagnostic tests and treatment across all medical specialties.

When advising self employed and senior director clients I often speak to them about the likelihood of them developing a non-serious (i.e. not life threatening) medical problem that irritates and can potentially keep them off work in short bursts, for two or three days at a time, intermittently over several months. This discussion usually centres around a non- specific condition like a ‘bad back’ but we could be talking about any one of dozens of low level problems that could cause problems with driving, sitting at a desk for prolonged periods, concentrating on a computer screen and so forth. In short the kinds of conditions that receive little priority from the NHS, are annoying or debilitating for the sufferer and typically need regular time off work or out of the office to get over.

It is a requirement that the NHS provides access to an initial consultation within 18 weeks of referral from the General Practitioner* and it is true to say that generally this is a maximum and many specialists see patients much more quickly. However, consider for a moment the implications of having to wait just one third of this maximum for our ‘bad back’ scenario: with a wait of around 6 weeks to see an orthopedic consultant on the NHS you face up one and a half months or more of on-going discomfort that may in the meantime prevent you from working or severely curtail the time you can spend being productive.

Long Term Illness

Moving on from the above issue, what if your medical condition is actually more serious or suddenly deteriorates and regardless of access to medical treatment you need to be off work for a longer period?

As a self employed person there is no sick pay from an employer. nor will the state pay for your mortgage on an on-going basis without severe financial limits and a minimum 13 week wait**.

It is possible then, through no fault of your own to fall ill or become injured and suddenly lose your entire income. It is then not a case of reducing productivity but instead facing the prospect of a total enforced change in lifestyle and possibly even losing your home or business.

Insurance Solutions

There are some relatively simple insurance solutions to the issues created by these health problems. Private medical insurance provides immediate access to state of the art secondary care with no waiting lists, whilst an Income Protection plan can pay you up to two thirds of your income if you are going to be unable to work for longer periods of time.

The problem is that across the population there is an enormous ‘protection gap’ where many people who require these kinds of insurance benefits simply do not take out the appropriate cover before a problem arises. According to industry statistics^ there are currently a fraction under 4 million private medical insurance policies in force in the UK covering 10.9% of the population whilst income protection covers around 10.3% of UK households^*.

Overall in the UK economy a total of approximately 131 million days were lost due to illness in 2011 according to the office for National Statistics^^.

The obvious issue is that illness or injury can strike any of us at any time and the majority of people simply don’t plan for the eventualities outlined above. We would strongly suggest that those people that work hard to build their career or grow their own business can be particularly vulnerable to lost income if illness strikes. But with the help of professional advisers like Premier Choice Healthcare, the trick is not to become one of the wrong kind of statistics – we ensure our clients have the right cover in place as part of their on-going personal sickness and absence planning program.

For more details on Income Protection and Private Medical Insurance please contact your local Premier Choice Consultant.

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