For most people, the decision to become an Independent Contractor is one of the most financially rewarding of their entire career, along with independent professionals benefitting from other perks, such as the flexibility, control, work life balance, and removal of office politics, which contracting can bring! When being your own boss, it can be easy to get caught up in the day-to-day activities and understandably your project requirements, however, we highly recommend that contractors do take some time to future proof their income for their own peace of mind and to ensure long term financial stability.
We do not usually think of our current income and our future earnings as an asset. However, if you take a moment to think about it, the money you earn pays for almost everything you have… mortgage, car loan, bills, children’s education, insurance and so on. Without it, you are faced with a worrying picture.
This issue is even more stark for Independent Professional Contractors, who agree pay rate with clients based on the days or hours worked. It’s a all or nothing scenario that you are either at work and being paid or unable to work and not receiving pay. Given this, it is vitally important to have protection in place to secure their future earning for these what-if scenarios.
What many people don’t realise is whilst you operate as self-employed, you can have policies in place to protect your income (along with other benefits too!), in a very simple and cost-efficient manner.
What is Income Protection?
Income protection provides you with a regular income, which is paid out if you cannot work due to medium or long-term illness or injury. It is designed to supplement some of your earned income if, due to illness or injury, you cannot earn an income yourself. The policy cover is usually limited to 75% of your pre-illness earnings, less the single person’s Social Welfare Disability Benefit, and can be received if you are out of work for longer than a period referred to as the “deferred period”, which typically ranges from 8 to 52 weeks.
How do I obtain Income Protection?
At the very minimum, you should explore your options for Income Protection in more detail by consulting with a Wealth Management expert. You can arrange a free financial consultation as part of your Icon Accounting service here.
Every individual’s scenario can be different, which means that solutions are best developed following your complimentary consultation, as it can determine your specific requirements and preferable policies around this.
Our Wealth Management partner, Rockwell Financial, has worked with Icon Accounting over the course of 10 years, and are experts in financial planning for contractors and how they can set themselves up for financial success, stability and security.
From their extensive knowledge and experience in the industries, they have brought their contractor umbrella plan to the market, which provides independent professionals complete protection for all those what-if situations, all at one affordable monthly cost. Find out more about their umbrella plan now.