Your guide to self-employed health insurance

Being self-employed allows you the flexibility to work when and where you choose, how much work you want to do and puts you in control of your earnings and types of work you want to do But going solo is not without its risks, especially when it comes to your health and you don’t have an employer to fall back on. 

This article will dig into what health insurance looks like for self-employed people, by looking into the following areas:

• What is health insurance?
• Why do I need health insurance as a self-employed person?
• What types of health insurance are available?

In the UK everyone has access to the NHS services if you become sick or injured, but as a self-employed person, you may choose to opt for a health insurance policy that covers any circumstances where you find yourself in ill health.

Health insurance, often called Private Medical Insurance (or PMI) is a contract an individual can take out, where they pay a monthly premium to cover medical treatment or conditions that begin after the policy is taken out. 

Like any insurance, there is a different range of levels of cover that differ from insurer to insurer. There will be many options to choose from which range from the types of treatment available, the location of where treatment is provided and the amount you’d be willing to contribute to have access to the treatment (the ‘excess’ you’ll pay when you make a claim).

As mentioned, all policies will differ, but health insurance can cover:

• The cost of hospital admission (to a private hospital)
• Diagnostic tests such as MRI’s, CT scans or X-rays
• Surgery
• Consultant appointments
• Accommodation
• Nursing care costs
• Drugs for extreme disease treatment, such as cancer, that may not be available to you on the NHS.
• Mental health services and treatment options
• Outpatient consultations
• Physiotherapy, chiropody, or other therapies

There are several reasons why health insurance may be beneficial to you as a self-employed person.

Using private health insurance could mean you wait less time to see a healthcare professional or a consultant. If you are missing work due to NHS waiting times, it may be a quicker way for you to get back to business. This doesn’t mean that you’ll be seen immediately but could benefit your business if you are able to be back quicker. 

You might find that there are specific health insurance policies for your industry or insurances that include several policies in one. 

For example, you may be able to find insurance specific for self-employed electricians that include your public liability insurance, life insurance, income protection as well as private medical cover. This would save you having several separate policies and bills, by including them all in one. 

With a private health policy, you’ll be able to choose the level of cover you think is appropriate for you and your business. For example, if you have trouble with your joints or are prone to injuries then you might choose a cover that allows you to access diagnostic tests and consultant appointments, as this would save you waiting for these things from the NHS.

As mentioned you can pay a monthly premium to have access to private medical care should you need to be seen sooner than the NHS can provide. The monthly payment will be accompanied by an excess payment when you make a claim to pay for any treatment you’ve received.

This cover will provide you with a lump sum payment if you are diagnosed with certain critical illnesses or severe medical conditions. What is covered and what is not, will be detailed in the policy.

This could be useful in order to keep a steady income for your household while you are unable to work. It could pay for treatment to help you recover, or be used to pay household bills or a mortgage if you are unable to create income through your business due to illness.

A life insurance policy is a personal policy you take out and pay for personally that will pay out a lump sum if you die or in some cases are diagnosed with a terminal illness. This will allow your family to still have a source of income should you be unable to provide any more.

A relevant life insurance policy works in a very similar way. Instead of you paying personally, the business pays for the policy and should you pass away a lump sum is awarded to your chosen beneficiary. This works in a very similar way to a ‘death in service’ benefit, and you can offer it to employees if you choose to take one on.

As a self-employed person, if you are unable to work, the money stops coming in. This is where income protection, also called personal accident and sickness cover, comes in. 

This insurance is for if you are unable to work for a period due to illness or injury. The payout on this will usually be a weekly sum, to cover bills and living expenses while you recover. If you are unable to return to work at all, then a lump sum payment will be made and how much will be stipulated in the contract. Income protection may also pay out if you have to take a significant reduction in income due to illness.

The Countingup business current account makes it easy to manage all your financial data in one simple app. The app will give you real-time insights into your cash flow, profit and loss reports, tax estimates, and the ability to create invoices in seconds. 

You can also share your bookkeeping with an accountant instantly without worrying about duplication errors, data lags or inaccuracies. Find out more here to save yourself hours of accounting admin and manual bookkeeping, so you can get back to running your business and doing what you do best.

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