Being your own boss brings enormous freedom, but it also removes the safety net that employed people often take for granted. No employer pension. No death-in-service benefit. And crucially, no Statutory Sick Pay if you fall ill.
The good news is that protection cover is available to self-employed people and for most freelancers and contractors it should be considered essential rather than optional.
Why protection matters more when you are self-employed
According to figures from the Office for National Statistics, there were around 4.37 million self-employed people in the UK as of November 2025. Worryingly, industry research suggests more than half of self-employed workers have no life insurance, private medical insurance, critical illness cover or income protection in place.
If you cannot work through illness or injury, your income can stop almost overnight. State support exists in the form of New Style Employment and Support Allowance (ESA) or Universal Credit, but the amounts are modest and designed to cover essentials rather than replace a sustainable income. For most self-employed households, relying on the state alone is not a realistic plan.
The main types of cover to consider
- Income protection insurance. Pays a regular income, typically 50 to 70 per cent of your gross earnings, if you cannot work due to illness or injury. Policies usually pay out until you recover, reach retirement age or the policy ends. According to the Association of British Insurers, income protection is one of the most underused forms of cover in the UK.
- Life insurance. Pays a lump sum to your family or business if you die. This is essential if anyone depends on your income or if you have a mortgage, business loans or shareholders who would need to buy out your share.
- Critical illness cover. Pays a tax-free lump sum if you are diagnosed with a specified serious condition such as cancer, heart attack or stroke.
- Private medical insurance. Can speed up access to diagnosis and treatment, helping you return to work sooner.
How much does it cost?
Premiums are based on your age, health, occupation, smoking status and the level of cover you choose. Income protection for a healthy professional in their forties might cost between £30 and £60 a month for a meaningful level of cover. The exact figure will depend on your circumstances, but the cost of not having cover can be far higher.
What to think about before applying
When you apply, insurers will ask about your income, your occupation, your health history and how much cover you want. As a self-employed applicant you will usually need to provide evidence of earnings such as SA302 forms or accounts for the past one to two years.
A specialist adviser can compare policies across the whole market and tailor cover to the realities of self-employed life, where income fluctuates and occupation definitions matter.
At Resolve Financial Solutions, we regularly arrange protection cover for self-employed clients across Weybridge, Reigate and the surrounding areas. If you would like to review what protection you currently have in place or explore what is available to you, book a free initial consultationwith our team.
*Please note: Protection policies have no cash-in value unless specifically stated. Conditions and exclusions may apply. Cover will cease if premiums are not maintained.