TL;DR
Self-employed people don't get sick pay, and Statutory Sick Pay does not apply to them. Income protection pays a monthly income if illness or injury stops you working, after a waiting period you choose. The definition of incapacity, the deferred period, how long it pays and how your income is assessed matter more than the headline price.
Key takeaways
- Self-employed people cannot claim Statutory Sick Pay, so income protection can replace lost earnings.
- Policies typically pay up to around 50% to 70% of your earnings.
- A longer deferred period, such as 13 or 26 weeks, lowers the premium.
- An 'own occupation' definition is usually the most valuable for skilled work.
- Musculoskeletal and mental health conditions are among the most common reasons for claims.
Income Protection for the Self-Employed UK: How It Works and What to Look For (2026)
If you are self-employed and cannot work because of illness or injury, your income usually stops. There is no employer sick pay, and Statutory Sick Pay does not apply. You may qualify for New Style Employment and Support Allowance if you have paid enough National Insurance, but it is a modest amount.
Income protection is designed to fill that gap.
How income protection works
- You choose a monthly benefit, usually up to about 50% to 70% of your earnings, depending on the insurer.
- You choose a deferred period: how long you must be off work before payments start. Common options are 4, 8, 13, 26 or 52 weeks.
- If you can't work because of illness or injury that meets the policy's definition, the policy pays the monthly benefit after the deferred period.
- Full-term policies pay until you return to work, retire, the policy ends or you die, whichever is first. Short-term (budget) policies pay for a limited period per claim, often one, two or five years.
- Benefits from a personal policy you pay for yourself are normally free of income tax.
What to look for if you are self-employed
The definition of incapacity
This decides whether you can claim:
- Own occupation: pays if you cannot do your own job. Usually the most valuable definition.
- Suited occupation: pays if you cannot do your own job or one you are suited to by education, training or experience.
- Any occupation or activities-based definitions: pay only if you cannot do any work, or cannot carry out a set of daily tasks. The hardest to claim on.
How your income is assessed
Self-employed earnings can vary. Insurers usually look at your taxable profit, often averaged over recent years, rather than turnover. Check how the insurer will assess income at the point of claim, and whether they offer agreed value or similar terms that fix the benefit at the start.
The deferred period
Choose a deferred period that matches how long you could manage on savings. A longer deferred period lowers the premium.
Guaranteed or reviewable premiums
Guaranteed premiums are fixed (or rise only in line with an agreed index). Reviewable premiums can be increased by the insurer.
Limited company directors
If you work through your own limited company, your company may be able to pay for executive income protection, which pays the benefit to the company. Discuss the tax treatment with your accountant.
What do people claim for?
Industry claims figures consistently show musculoskeletal problems, such as back and joint conditions, and mental health conditions among the most common causes of income protection claims. These are also conditions that critical illness cover usually does not pay for, which is why income protection and critical illness cover do different jobs. See life insurance with critical illness cover.
What affects the price
- Age, health and smoking status
- Occupation: manual and higher-risk work usually costs more
- The monthly benefit
- The deferred period
- Full-term or short-term payment
- The definition of incapacity
- Guaranteed or reviewable premiums
How to keep the cost down
- Lengthen the deferred period to match your savings.
- Consider a short-term policy if a full-term one is unaffordable, understanding that it stops paying after the limit.
- Cover what you need, such as essential bills, rather than your full income.
- Apply while young and healthy where you can, as premiums are set at the start.
Get a quote
WeCovr is an FCA-regulated broking firm. Get a quote through WeCovr, and a specialist from WeCovr or one of its broker partners will help you compare income protection from a range of UK insurers, including how each one assesses self-employed income and defines incapacity. Brokers are usually paid a commission by the insurer when a policy is arranged.
Get an income protection quote
You can also estimate the cover you need with the income protection calculator.
Frequently asked questions
Can self-employed people get income protection?
How much of my income can I cover?
Is income protection tax deductible for the self-employed?
What is a deferred period?
Sources
- GOV.UK: Statutory Sick Pay eligibility
- GOV.UK: New Style Employment and Support Allowance
- Association of British Insurers and Group Risk Development: protection claims figures for 2025, published June 2026
Important Information and Risks
No advice: This article is for general information only. It is not financial, legal, insurance, or tax advice, and it is not a personal recommendation. WeCovr does not assess your individual circumstances or recommend a specific product through this article.
Policy exclusions and underwriting: Insurance policies, including life insurance, private medical insurance, critical illness cover, and income protection, are subject to insurer underwriting, eligibility, acceptance criteria, terms, conditions, limits, and exclusions. Pre-existing medical conditions may be excluded, restricted, or accepted on special terms unless an insurer confirms otherwise in writing.
Tax treatment: References to tax treatment, HMRC rules, or business reliefs are based on current UK legislation and guidance, which can change. Tax treatment depends on your personal or business circumstances and may differ from examples in this article.
Before you buy: Always read the Insurance Product Information Document (IPID), policy summary, and full policy terms before buying, renewing, changing, or keeping cover. If you are unsure whether a policy is suitable for you, speak to an insurance adviser.
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