Mortgages & Home Finance Insurance & Working From Home

Date Published:

03/06/2008

Protection

As soon as you move from being an employee to being self-employed, you lose the cushions that your employer may have provided against illness, accidents at work and your death.

Life Insurance

If you want to protect yourself - and your family - from loss of your income as a result of death, considering topping up your life insurance. You should inform your life insurer of any changes in your personal circumstances including self-employment and aim to review your policy every five years to ensure it still meets you and your family's needs. Remember to write your insurance policy in trust. This way, when you die the money goes straight to the person, or persons, you name as beneficiary, saving the 40 per cent tax that could be liable if the sum is passed to your estate and subject to inheritance tax. Your insurer should provide the necessary paperwork free of charge.

Income Protection Insurance

You could also consider taking out income protection (sometimes known as permanent health insurance) which is a policy that pays a monthly benefit for as long as injury or illness prevents you doing your job and provides a regular income until you're fit enough to resume work. Compare income protection policies at Moneysupermarket. .

Critical Illness Insurance

You could also possibly consider critical illness insurance which pays out if you suffer from one of a list of pre-defined life threatening conditions like cancer, heart disease or stroke.

Private Medical Insurance

You could also consider private medical insurance which would give you some control over the timing of an operation, so that you could organise it to coincide with a quiet business period. There is no single best-value plan – exactly which cover is right for you will depend on your own individual circumstances. Seeking advice from a specialist PMI broker in your area can pay dividends here, as they will be able to share their knowledge of local healthcare provision. This will help you make an informed decision about cover levels and work out which benefits are important to you.

To get an idea of what's available compare private medical insurance policies at www.healthinsurance.co.uk and Private Healthcare UK. Compare life insurance, income protection and critical illness quotes at broker LifeSearch and Life Policies Direct.

Tax Issues

Any insurance you buy for your business is treated as a business expense for tax purposes, which means that you can deduct it from your earnings before calculating your tax bill. This saves you tax. Speaking of which you can also take out insurance against investigations by the tax authorities, which will pay the fees of an accountant if you are subject to an in-depth investigation by HM Revenue. For more on self-employment, working from home and tax, visit the HM Revenue & Customs website.

Specialist Insurance Packages There seems to be no end to the list of other insurance possibilities and it can be worth contact your trade association, professional association or other national association for details of insurance packages specifically tailored to the kind of work you do. The particular advantage of doing this is that such associations may have negotiated a special deal for their members. To guarantee you have the right protection for you, your business and your family it's worth speaking to an IFA. You can find one in your local area at www.unbiased.co.uk.

The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.