Sickness Insurance: a guide

With an ever-ageing working population, sickness insurance is something we should all consider. Here’s how to protect yourself against being unable to work due to illness.

Kamran Altaf

From the Life team

minute read

posted 9 DECEMBER 2019

What is sickness insurance?

Sickness insurance is a type of income protection that can help if you have to stop working because of illness or injury. While many policies pay out as a monthly benefit, others pay out a lump sum – the aim of both types is to ensure your income remains consistent when you’re unable to work.

What if I’m self-employed?

You can still qualify for sickness insurance cover. Many people who work for themselves choose to take up sickness insurance. That's often because they won't get sick pay as they might from an employer (although they might qualify for state benefits).

With self-employed sickness insurance, your monthly income could be protected if you can’t work due to accident or sickness.  Also, you can insure yourself for the following if you’re self-employed:

Injury – You might not be able to work due to injury.
Pay – If you’re self-employed you won’t qualify for statutory sick pay or redundancy pay.

What is self-employed income protection insurance?

Self-employed income protection insurance is a policy that can cover you if you’re unable to work because of illness or injury. Self-employed income protection could give you a tax-free income – and it might continue to pay out until you can go back to work, or retire.

How is sickness insurance different to statutory sick pay?

The biggest difference could be the amount you’re paid. You can get £94.25 a week Statutory Sick Pay if you're too ill to work as a full-time employee, which tends to be quite a bit less than people’s normal salaries.

Ask yourself, is this amount enough to meet the financial needs of you or your loved ones? And might life be a lot easier if you had cover in place to protect you against a range of accidents or ailments?

What level of cover is right for me?

An important factor to consider when entering into a sickness insurance policy is the length of time you’ll be covered. Policies can vary from as little as 12 months, for short-term coverage, or may offer cover as a percentage of your salary right up to retirement, should you have what’s classed as a long-term illness.

The variable levels of cover can have a large impact on the value of your quote. You can find the right level of cover for you and submit a request to a range of the UK’s leading insurance providers with us.

Will I be accepted for sick pay insurance?

This is will come down to your personal circumstances and the insurance provider. Some providers boast “Guaranteed acceptance for nearly all occupations”, however that doesn’t provide a definitive guarantee.

While you may find a provider that actually guarantees acceptance, this doesn’t necessarily mean their policy is the right option for you. Each insurance provider will judge risk in their own way, meaning that you will get different quotes from different providers. Always be sure to read your policy carefully to ensure that you have the cover that best suits your needs.