Foster Denovo|News & opinion|News|Securing protection if you are self-employed

Securing protection if you are self-employed

When advising self-employed clients, it is crucial advisers build insurance policies to match them. FT Adviser have produced a guide to advising the self-employed and one of our advisers, Jamie Smith, has commented on the potential challenges and advantages.

One potential challenge that is unique to self-employed workers when insuring their income against long-term ill health is around how they define their earnings, suggests Jamie Smith, a financial adviser at Foster Denovo.

He says: “Typically most insurers will provide a maximum benefit of between 50 per cent to 75 per cent of a self-employed worker’s average net profit over the last three years.”

However, Jamie outlines two potential issues with this: “First, the net profit may understate a worker’s earnings and, secondly, self-employed earnings can vary significantly from year-to-year and it may be that a few years after setting up the plan, their earnings have changed.”

He adds: “Both of these could mean that a worker cannot get the level of cover they need.”

But according to Smith, the advantage self-employed workers have is the opportunity to establish their own employee benefits package and tailor it to their own personal situation.

He says: “Yes, they will have to pay the cost  of the cover themselves, but for small company owners who choose to remain self-employed, it might be possible for their limited company to pick up the cost as a tax-deductible expense which can have tax advantages.”

Read the full article on FT Adviser here.

prev
next
Find me an adviser
Start your search
Register

Keep up to date with our latest news

Newsletter sign up

 
 
 
Read our privacy policy, by clicking here.
 
captcha
 
From time to time, we would like to contact you about news, events and other ways we think we can help you. You can unsubscribe from this at any time using the link within your email or by writing to us. Details can be found within our privacy policy. Please be assured that we will not pass your details on to any third parties.
 
 
You can contact me by:
Find me an adviser
accordian map downloadplusminus play-video select-box close downloadmapmapmap mapmapmapselect-boxmap mapvideo arrowarrow arrow