Life insurance for the self-employed 

Nearly 14%* of the Australian workforce are self-employed – this group includes freelancers, entrepreneurs, tradespeople, and anyone who runs their own business. There are many benefits, both financial and professional, to working for yourself. But it’s important to be aware of potential risks too. 

Every business has overheads, and if, like many small business owners, you also have fluctuating cash flow, it’s a good idea to think about how you can best prioritise your spending. When money is tight, income protection insurance might seem like one cost you can do without. But if you’re self-employed, the most important asset you have is not your equipment or your car – it’s you. 

Do you have a plan in place if you’re sick or injured and temporarily unable to work for months? Would you be able to pay the bills – for yourself and your business? Self-employed people don’t have access to sick leave or pay, and are typically not eligible for workers compensation, even if you’ve been injured at work (although you are required to provide it for your employees, if you have them). Income protection is one way you can help fill the gap. 

Income Protection 

Income protection insurance will generally cover up to 70% of your monthly income, for a set amount of time, if you’re unable to work due to injury or illness. Waiting periods apply to income insurance before any benefit is paid – so you would need to be unable to work due to injury or illness for longer than the waiting period before any benefits accrue. Premiums may be tax deductible, which helps to make them more affordable, and you can also choose to fund them through your superannuation. This option may reduce your superannuation balance, so it’s important to consider your retirement plans if you choose this option. 

Life Insurance 

When you’re self-employed, you have two sets of responsibilities to consider in the event of your death: your personal and your business responsibilities. Life insurance can help with personal expenses – such as paying out your mortgage and providing financial support for loved ones – and it can also help cover outstanding business expenses, such as accountant, lawyer and financial adviser fees, government taxes, and overheads such as employee salaries, supplier payments or leases. 

Every small business is unique, and there are no one-size-fits-all solutions. Whether you’re an entrepreneur, a freelancer, or a small business owner, I can help you protect your business with affordable and potentially tax-effective insurance solutions that meet your specific needs, giving you peace of mind as you work to achieve your business goals.

Please don’t hesitate to reach out to the team at ADR Wealth to make sure your business, family and lifestyle are protected.

* Employment in the 2021 Census | Australian Bureau of Statistics (abs.gov.au) 

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.