If you're self-employed

We don't exclude any particular occupations and we'll consider you as self-employed if you work for yourself, or you are a director of/own your own business or own 25% or more of the shares in a business.

Below we show how Lifestyle Cover Insurance will affect you if you're self-employed.

Self employed elegibility
Accident or sickness Unemployment
Eligibility

You can take out Lifestyle Cover to protect your income if you can't work due to an accident or sickness, as long as you meet our eligibility criteria.

You don't need to tell us about your medical history when you apply, but we'll check this when you make a claim.

We don’t specifically exclude chronic conditions, such as:

  • Asthma
  • Cancer
  • Diabetes
  • HIV/AIDS

However, you'll not be able to claim in the first 12 months of cover for any illness or disease which you suffered from in the 12 months before this cover started.

You can take out Lifestyle Cover to protect your income if your employment ends due to circumstances outside of your control, as long as you meet our eligibility criteria.

Unemployment cover may not be suitable for all self-employed customers because to make a claim for unemployment benefit, your business must cease to trade (permanently stop trading) as a result of it not having enough assets to pay all debts and liabilities.

In other words, when the revenue from your business and its assets, for example, company premises and capital, are worth less than the money your business owes to others.

Claims

When you make a claim for accident or sickness, you'll need to send us:

  1. confirmation from your doctor (see the note below) that you're unfit for work; and
  2. proof of your gross monthly income for the last 12 months. For example, details of your income declared to HM Revenue & Customs (HMRC), bank statements showing these payments have been made to you from your business or confirmation from your accountant.

Note: While we'll accept certification from your doctor for most illnesses, for us to consider your claim we do need a suitably qualified consultant to confirm that you’re unable to work in the case of a back-related condition. For us to consider your claim for depression the symptoms must be certified as severe by a suitably qualified consultant or doctor.

When you make a claim for unemployment, you'll need to send us:

  1. proof that your business has ceased to trade, for example confirmation from HMRC, or proof that it’s in the hands of an insolvency practitioner or an officer of the bankruptcy court.
  2. confirmation from the Jobcentre (you must satisfy the terms of your Claimants Commitment to be able to claim on this policy – your Jobcentre will usually issue you with a benefit award letter which contains this information); and
  3. proof of your gross monthly income for the last 12 months. For example, details of your income declared to
    HM Revenue & Customs (HMRC), bank statements showing these payments have been made to you from your business or confirmation from your accountant.
Qualifying period There's no initial exclusion period under our Accident and Sickness insurance, unless you have a pre-existing medical condition.

There's an initial exclusion period under our unemployment insurance. This means you wont be able to claim if you're made unemployed in the first 60 days of your cover starting.

However, we can provide unemployment cover as soon as you add it to your policy, if this policy is replacing another policy, either from us or another insurer (and your other policy has been active for at least 12 months immediately before taking out this unemployment cover and you have not claimed under your other policy within the last 12 months).Terms and conditions apply and you can find them in the policy document.

Limitations and exclusions apply. For more information about what is and isn’t covered, please read our  PDF file: Lifestyle Cover Insurance Key Features PDF size: 133KB  or for full details see our  PDF file: Lifestyle Cover Insurance Policy Booklet PDF size: 327KB  

Important information about unemployment cover for self-employed

If you're personally responsible for the debts of your business (for example, a sole trader or non-limited company), to be able to claim for unemployment, you'll have to be made bankrupt or have applied for an Independent Voluntary Arrangement (IVA) or have prepared and submitted final closing of your accounts for the HMRC or dissolved your partnership.  If this doesn't apply to you, unemployment cover may not be suitable for you.

How do I know what benefit amount is right for me?

The most we'll cover is 65% of your gross monthly income.

This is your total monthly earnings before tax and National Insurance contributions. For many people this is not far off their usual take-home pay.

If you are self-employed, you'll need to 'validate your income' for the last 12 months, for example, give us details of your income as declared to HMRC or confirmation of your earnings from your accountant. 

While we can offer to cover up to 65% of your gross monthly income, choosing maximum cover may not suit you, so take a moment to think about the following.

  • Monthly costs - add up your monthly costs, for example, mortgage or rent payments, food, phone bill, utilities (gas, electricity, water), childcare, gym membership or credit card bills.
  • Support from your business – will you continue to receive the same or a reduced income from your business if you can't work? Does your business have specialist insurance in place to cover this situation, for example ‘Keyman Insurance’ which includes Accident, Sickness or unemployment cover?
  • Savings and income - review your savings and other similar schemes. Are your savings set aside for a rainy day or do you already have plans for them, for example, a wedding, holidays, a new car? Do you have income from other sources?
  • Other insurance - take into account any other payment-protection policies you may already have in place.
  • Government benefits - are you entitled to any government benefits such as Support For Mortgage Interest or Income Support?

How long do I have to wait before you pay my benefits?

We don’t pay benefits straight away when you make a claim - we call this the deferred period.

You can choose a 30, 60, or 90-day deferred period for accident and sickness or unemployment options.

You can also have a longer deferred period of 180 days for accident and sickness cover. We’ll work out your claim at a daily rate and pay your benefit to you monthly in arrears (this means every month for the month just gone).

More information about when your payments start.

Will this policy affect any of my state benefits?

Monthly benefits paid under Lifestyle Cover may affect your entitlement to benefits from the Department for Work and Pensions (DWP). If you’re not sure whether you'll be able to claim government benefits, contact the Department for Work and Pensions at www.dwp.gov.uk.

By clicking the link above, you are leaving our website. We are not responsible for the accuracy of the information or the content of the linked site.

Examples

1. Mr Edwards knows he can afford to pay himself for up to four months from his business if he becomes too ill to work, and has a small amount of personal savings put aside for a rainy day. Mr Edwards chooses:
  • a 90 day deferred period for his accident and sickness cover,
  • a 30 day deferred period for unemployment cover; and
  • a Standard payment option on the policy.

This means that if he's unwell and can't work, his business will continue to pay him an income for the first four months and then his accident and sickness benefit payments will start with his first benefit payment on day 121.

If his business ceases to trade (permanently stops trading), he’ll rely on his savings until his unemployment benefit payments start, with his first benefit payment on day 61.

2. Miss Johal owns 50% of her business. She's agreed with her business partners that if she's unable to work due to accident or sickness, she'll not take a wage from the business for this period. She doesn’t currently have any savings, but plans to start putting a little aside each month.

Miss Johal chooses:

  • a 30 day deferred period for her accident and sickness cover,
  • a 30 day deferred period for unemployment cover; and
  • a Back To Day One payment option on the policy.

This means if she's unwell and cant work, or if her business ceases to trade, she’ll be able to take her benefit as soon as possible. Her benefits will start to build up from the first day of her claim and she’ll receive her first benefit payment 31 days after the start of her claim.