💼 Self-Employed Cover Specialists

Protection for Sole Traders

When you're self-employed, there's no sick pay and no safety net. If you can't work, the income stops. We fix that.

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£0Statutory sick pay
70%Income replaceable
£10/moCover from
Income Protection 💼 Replaces up to 70% of income Covered FCA authorised · FRN 1047044
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🏛️FCA Authorised · FRN 1047044
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Key facts at a glance

Profession
Sole Trader
Recommended priority cover
Income Protection
Adviser
Whole-of-market · FCA authorised (FRN 1047044)

Reviewed by the LifeInsuranceForMe advice team · Last updated August 2026 · FCA authorised, FRN 1047044

📖 Read the Sole Trader guide to life insurance & income protection →
💡 Adviser insight

As a sole trader you can often choose a very short waiting period — Personal Sick Pay plans run from as little as one day — which suits people with no sick pay behind them. The right wait is a balance between speed of payout and premium.

Why It Matters

The Risks Sole Traders Need to Plan For

Being your own boss means carrying all the risk yourself. Here's what to plan for.

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No sick pay at all

Sole traders don't even get Statutory Sick Pay — illness means zero income.

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Personal liability

Business and personal finances are intertwined, so your mortgage is exposed if you can't earn.

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Variable income

Irregular earnings make a financial shock from illness even harder to absorb.

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You are the business

If you stop, the business stops — there's no one to cover for you.

Recommended Cover

The Right Protection for Sole Traders

Based on the specific risks of your profession, here's what we typically recommend — ranked by priority.

TOP PRIORITY
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Income Protection

The essential policy

Replaces a percentage of your income if illness or injury stops you working — short or long term.

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Life Insurance

Family & mortgage cover

A lump sum to clear debts and protect your family.

❤️‍🩹

Critical Illness Cover

Serious illness cushion

A tax-free payout on diagnosis to fund time off and treatment.

Why Your Job Is Different

How We Get Sole Traders a Better Deal

Mainstream insurers often misprice or misunderstand your profession. Here's how we fix that.

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Self-employed specialists

We base cover on your real, sometimes variable, earnings.

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Day-one cover options

Short deferred periods so you're paid quickly when income stops.

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Tax-efficient structuring

We advise on structuring cover sensibly for the self-employed.

Already covered?

Two policies at the same price can pay out very differently

If you already have life insurance, critical illness or income protection, get a free plain-English review — what it does well, where it's weak, and what switching would gain and lose you.

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FAQs

Sole Trader Insurance — Your Questions Answered

Do sole traders get any sick pay?
No — not even SSP. That's why income protection is the single most important policy for the self-employed.
How is my income assessed if it varies?
We typically average recent years' earnings to set a realistic, claimable benefit.
How quickly can a policy pay out?
You choose the deferred period — as short as one day for those who need fast cover.
Is it expensive?
Often more affordable than people expect — many sole traders are covered from around £10/month.

Life Insurance & Income Protection

Sole Trader FAQs — Life Insurance & Income Protection

Common questions UK sole traders ask about protecting their income and family.

Do sole traders get any sick pay?
No — not even Statutory Sick Pay. That is why income protection is the single most important policy for the self-employed.
How much does income protection cost for a sole trader?
Many sole traders are covered from around £10 a month. The price depends on your earnings, the benefit and the deferred period.
Is income protection worth it if I am self-employed?
Yes. If you can't work, your income simply stops — a monthly benefit that replaces a large part of it is usually well worth the cost.
How is my income assessed if it varies?
We typically average recent years' earnings to set a realistic, claimable benefit.
How quickly can a policy pay out?
You choose the deferred period — as short as one day for those who need cover to start fast.
How much life insurance does a sole trader need?
Enough to clear your mortgage and protect your family; we calculate a sensible figure and keep the premium affordable.

Role-Specific Detail

Sole Trader-specific questions, answered properly

The operational detail that decides claims for sole traders — sick pay schemes, licences, contracts and the wording that matters.

Do I really get no Statutory Sick Pay at all as a sole trader?
Correct — SSP applies to employees, not to the self-employed. There is no statutory safety net for a sole trader, which is why the deferred period on any income protection policy matters far more for you than it does for someone with an employer scheme behind them.
How do insurers calculate my income if my business is new?
Most want at least one full year of accounts or self-assessment, though some will consider a shorter trading history with evidence such as contracts, invoices or projections. If you are newly self-employed it is worth asking specifically, as insurer appetite for short trading histories varies.
Can I claim if my business income drops but I am still working?
No. Income protection responds to your inability to work through illness or injury, not to a downturn in trade, losing a client or seasonal quiet periods. That is a business risk rather than an insurable health risk.
What happens if I take on staff and become an employer?
Your personal cover continues unchanged. What may change is the right structure — once there is a business with employees and overheads, business protection and key person cover become relevant alongside your personal policy, and incorporating may open up company-paid options.
Should I insure profit or drawings?
Usually net profit before tax, which is what most insurers assess for a sole trader, rather than what you happen to draw in a given year. Drawings can be artificially low for tax planning reasons, so using them alone can leave you significantly under-insured.
Can I get cover if I have several small income streams?
Yes. Insurers can generally build a benefit on total self-employed earnings across activities, evidenced by your self-assessment. Portfolio working is increasingly common and does not usually complicate an application, though it may require slightly more documentation.
Is it worth incorporating to get better protection options?
It can be, though tax and legal considerations should lead that decision rather than insurance alone. Incorporating opens up Executive Income Protection and Relevant Life cover, both of which can be company-paid and more efficient. It is a conversation worth having with your accountant.

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What cover are you interested in? (Select all that apply)

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🛡️ Life Insurance

Lump sum for your family if you die

✓

💷 Income Protection

Replace up to 70% of income if ill

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❤️‍🩹 Critical Illness

Lump sum on diagnosis

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🏠 Mortgage Protection

Clear your mortgage if you die

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