Self Employed People

Life insurance is available for self employed people and it is no different to life insurance for employed people.

When it comes to of cover that pays a claim when somebody dies there isn’t much debate after the event. Death is pretty final and conclusive. When you’re gone, you’re gone.

What people actually do for a living can have an affect on the insurance but the factors that make a difference can impact employed as well as self employed people.

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In most cases the insurance itself should be unaffected by occupation unless it is a particularly high risk occupation such as a deep sea diver, light aircraft pilot, in the armed forces or involves working at excessive heights.

If the occupation is ‘high risk’ the price may be increased but not every insurance company sees things the same way. Some might put the price up but some might not. An adviser can help clear up the options.

A lot of self employed people are tradesmen and are more ‘hands on’ than office workers. This makes them more vulnerable to injury and there are other benefits and types of cover that can be more affected by this than life cover.

Waiver of Premium (WOP) is an additional benefit usually included with a life insurance policy which protects the monthly payments if the policy holder is unable to work due to serious illness or disability. Different occupations are entitled to different ‘quality’ of cover based on the level of risk.

People who regularly work in an office environment are generally categorised as being in a ‘Class 1’ occupation which represents the lowest risk. They are usually entitled to ‘own occupation’ WOP so if they are unable to do their own job the payments will be ‘waived’ until they can return to work.

The majority of tradesmen are ‘Class 4’. A class 4 occupation requires better cover because they are exposed to the possibility of injury but because insurance companies try to avoid risk, the level of cover is usually lesser than for an office worker. They need to be unable to perform a certain number of basic tasks before the WOP takes over paying for the cover. To qualify they need to be more severely disabled.

This same ‘definition’ of cover applies to the Total & Permanent Disability benefit that is usually included with Critical Illness Cover. People with more manual occupations often need to be more severely disabled before they can make a successful claim.

To find out if your occupation is considered high risk you should try to speak directly with insurance companies or with an independent adviser who has direct access to the insurance underwriters and can discuss your case in detail.

All circumstances are assessed on individual merit and not all life insurance companies assess cases in the same way.