How secure is your contracting income?
Take a moment to think of what is important to you – for most of us the answer is of course our loved ones and our health with financial status trailing in importance – after all material things are insignificant in the grand scheme of life. However, we may not take the time to think about how secure our current financial status would be if we were unable to work due to accident, illness or a disability. We asked Miceal Gunning of Invesco, an independent financial advisory company, about the merits of Income Protection insurance for contractors:-
As a self-employed contractor you may have no state illness benefit entitlement, so you are on your own when it comes to funding your lifestyle in times of ill-health – a sobering thought. Have you worked out how long your personal savings would last if you were unable to work for six months or more? Would you have to sell assets to survive financially? What other sources of income would you have?
In general, we tend to be over optimistic when it comes to insuring the things that matter, after all, it won’t happen to me, and for many insuring your income may seem redundant, however, given that your income pays for just about everything – your mortgage, car loan, bills, children’s education, other insurances – perhaps it’s time we take the idea of insuring your income seriously.
So, how do you go about setting in place adequate protection? Well, Income Protection, a form of disability insurance, is designed to provide you with a replacement income each month, meaning your typical outgoings are covered whilst you recover from your illness and look forward to returning to work, no matter how long that may take. The amount of cover you receive is determined by your current salary and health status and this determines the monthly premium which you pay. As there are no restrictions on the type of injury, illness or disability that can be covered, you have the peace of mind that whatever the eventuality you will be covered. What’s more, with income protection, you can choose a plan that suits your individual circumstances with a range of flexible cover types available and as your needs and circumstances change you can adapt your policy to match them. In addition, as the premiums qualify for tax relief the net cost to you is less than you might expect.
For further information please feel free to contact Miceal Gunning at www.invesco.ie