Many people, especially those who are self-employed, fail to plan properly for if they become unable to work through accident or injury. A lot of people also don’t make sufficient provision for their families in the event of their death. With one in four families in the UK having less than £95 in savings, a financial back-up plan is essential.

This is what protection insurance is for. It offers a safety net for you and your family in case your normal income stops, providing a regular payment or lump sum to replace your lost earnings.

Ensuring your family’s future, whatever happens, is a great way to achieve peace of mind. With that in mind, we explain exactly how protection insurance works, what types of policies there are and who can most benefit from this type of cover.

How does protection insurance work?

Protection insurance covers you if you are unable to work due to sickness or accident, or if you pass away. Like most types of insurance, you pay monthly premiums, the level of which will depend on various factors.

If you become unable to work, due to sickness or injury, you will be able to get a regular payment or lump sum to replace your lost salary. This is particularly relevant for the self-employed, who will not have an employer to cover them for even short periods of illness.

The payments you receive will normally be based on a percentage of your regular income and the higher your income, the higher your premiums will be. Unlike your standard income, however, the money you receive from your policy will be tax-free.

In the event of your death, a lump sum will be paid to your dependents, helping to ease their financial situation. Again, this lump sum will be tax-free, ensuring that every penny goes towards supporting your family.

Policies vary considerably between lenders, as do the qualifying criteria you need to meet. You therefore need to make sure that you choose a policy which matches your requirements, giving you and your family the protection you need.

Types of protection insurance

There are various different forms of protection insurance, designed to provide financial support in different circumstances. Most policies are aimed at employees, particularly the self-employed, although there are also some protection insurance policies aimed at employers.

Protection insurance for individuals:

If you are an employee or self-employed, you should consider the following types of insurance policies:

Sick pay insurance – This provides a regular, tax-free payment if you become too ill to work. Very-popular with the self-employed, who often have no other safety net.

Critical illness insurance – If you a seriously injured and unable to work, you can get a cash-free lump sum to support you while you recover or make more long-term arrangements to support yourself.

Life insurance – This provides a tax-free lump sum to your dependents in the event of your death. Can be expanded to include your partner and children, protecting your entire family in the event of a death.

Protection insurance for businesses:

If you are an employer, the following types of cover can benefit you and your employees:

Employee life insurance – Allows you to provide life insurance cover for your employees, so they have the peace of mind that their families are covered in the event of their death.

Do you really need it?

Nobody likes to think about the worst happening and it can be tempting to bury your head in the sand. However, if you want to ensure your family’s future, no matter what happens to you, protection insurance really is a must.

As we’ve stressed several times, for the self-employed it is particularly important. While protection insurance is an extra expense, the sense of security it brings is well worth the price. With policies starting from as little as a few pounds a week, you could get yourself and your family protected for less than the price of a cup of takeaway coffee.

Who can get protection insurance?

Different providers have their own criteria for who they will accept, but there will normally be some kind of age restriction and a requirement to be working a minimum number of hours per week.

ESMI policies are available to anyone aged 18-61 and your policy can then be renewed up to the age of 68. We also require you to be working a minimum of 16 hours a week and to be a permanent UK resident.

One thing to look out for is how different insurance companies treat people with pre-existing medical conditions or who work in “risky” professions. Many insurers will refuse cover or charge much higher premiums based on these factors. This is where ESMI are different and is really what sets us apart. We offer policies irrespective of your medical history or profession.

Get a protection insurance policy, no matter who you are

Essential Supplementary Medical Insurance (ESMI) offers health protection insurance to individuals and businesses to ensure your financial security when you are unable to work due to an accident or sickness, or if you pass away.

All ESMI insurance products are guaranteed acceptance, meaning you can get cover no matter what your medical history. We have a fast, simple online application system and we don’t bump up our premiums depending on your job or how much you drink.

Our policies are clear and simple and we offer a 30-day money-back guarantee. You can also cancel your policy at any time after the first 30 days, so you have complete flexibility.

Apply now to make sure your family is protected, no matter what. If you would like to find out more about our policies or service, please don’t hesitate to get in touch.