As of last year, self-employed people made up over 15 per cent of the working population, with the overall number of self-employed workers having risen to 4.8 million, the Office for National Statistics reports.
It’s a huge, diverse, and growing group of workers, and one with its own unique considerations for advisers to be aware of.
The odds are that you have clients, or would-be clients, who are running their own businesses, freelancing or on fixed contracts.
They are likely to need to be educated about the world of income protection and keen to learn more about their income protection options.
Taking the time to discuss what would be important to your client if they were unable to work and calculating how long their savings would last, will help you to find them the most suitable cover for their circumstances.
Income protection policies can be as diverse as they are complex.
Here are the 10 best strategies to take when speaking to those clients.
1. Policy gaps: bridging the spaces between contracts
Contracting and freelancing can bring significant flexibility and independence for clients, but it does have its own drawbacks. For example, sometimes gaps arise between one assignment finishing and the next one starting.
Illness has a habit of striking at the least convenient moments, and if your client is unfortunate enough to fall ill during this period, they may well find that their insurer is not able to cover them adequately, and they might find themselves unexpectedly out of pocket.
Asking your client about the nature of their working patterns, contracts and what the usual gaps are between their work is an important line of inquiry, and definitely one to ask in your conversations.
The more information you are able to obtain on an individual’s working practices, the better the position you will be in to judge if they need a plan that offers them periods of continuous cover or if there is a pattern to follow.
Ultimately, it’s about putting the client’s mind at ease and making sure you have all the information to bridge any gaps that clients may experience and which could make them financially vulnerable.
2. Consider policies that ‘guarantee’ a proportion of benefit
When a self-employed client files a claim for income protection, the insurer might want to know what their income was immediately before they submitted the claim, in order to make a judgement on how much to pay.
This can be particularly problematic for contractors and freelancers if they had an unusually quiet month just before becoming unwell.
Put simply, they might not get as much cover as they thought they would.
That doesn’t have to be the case. Some insurers now offer the opportunity to fix the level of cover at point of application, meaning there’ll be no nasty surprises when your client is most at need.