How to protect yourself against illness, accident and death when you are self-employed

In the event of a problem, a self-employed person can only rely on him/herself. It sounds a little cliché, but it is nevertheless true. Even if efforts are being made to improve the social status of the self-employed, you should always take certain precautions. Several insurance solutions will allow you and your family to protect yourselves against the financial consequences of a long-term illness or death.

What will you be entitled to?

WORK INCAPACITY

During the first two weeks of your work incapacity, you receive absolutely nothing. Previously, you had to wait a month before receiving an allowance, but this period has now been shortened. From the 15th day, you will be entitled to a maximum daily allowance of €60.26 (with dependents), €48.22 (single) or €36.47 (cohabitant). Of course, this will cause a significant drop in your income. Please note that it is essential that you also qualify for compensation. Otherwise, you will not be entitled to anything at all. This will depend on your social security contributions and whether your work incapacity is recognised by a mutual insurance medical adviser. In addition, these are gross amounts which are therefore taxed as replacement income.

DEATH

If you die, under certain conditions your surviving spouse will be entitled to compensation as a result of your self-employment. If certain age conditions are met, it will be a survivor's pension. Otherwise, a transition allowance will be possible. This will also apply in the event of the death of your spouse. By analogy, this also applies if your spouse dies. You will find more information about the survivor's pension for the self-employed here.

Guaranteed income

If you are affected by an illness or an accident, your fixed income will decrease while your fixed expenses will continue to exist, but your regular income will disappear (for the most part). Guaranteed income insurance is therefore essential in order to avoid financial problems in this type of situation. Such insurance pays you a monthly sum when you are unable to work. The amount depends on the sum insured, the degree of incapacity for work, the waiting period provided for in the insurance policy and the remuneration you grant yourself.  You can insure up to 80% of your fixed salary. The premium for this insurance is deductible as a professional expense. It is also possible to take out coverage for work incapacity in a Private Supplementary Pension for the Self-employed (PSPS), a Pension Commitment for the Self-employed (PCS) or an Individual Pension Agreement (IPA). If you work in a medical or paramedical profession, you can have a disability benefit (and death coverage) included in your INAMI contract. You conclude this contract via your INAMI allocation, which you receive if you are covered by an agreement. The exact amount of the allocation differs from one medical profession to another. The professional categories considered are physicians, dentists, physiotherapists, pharmacists, speech therapists and self-employed nurses.

Revenue insurance  

Do you work through a company? In this case, revenue insurance is a worthwhile option, especially if your absence from the company almost certainly leads to a decrease in the company's turnover. With revenue insurance, you guarantee the continuity of your business. Note that the beneficiary in this case is the company, not you as a self-employed person. Premiums for revenue insurance are fully tax deductible for the company as a professional expense. The amounts paid to the company by the revenue insurance are taxed in the same way as other income (you therefore pay corporate tax, provided there are no ancillary costs). There is, however, a limitation, in that you can usually only insure a maximum of 60% of your turnover with revenue insurance. If there are several directors/managers who generate revenue, it is possible to insure 60% of the turnover contributed by each of them.

Death insurance

A death insurance policy pays a lump sum if the insured person dies before the policy maturity date. This insurance is a very good idea if you work in the company with your partner. In the event of the sudden death of one of the two, there could be many financial problems. A death insurance policy could therefore limit these problems. This coverage can also be included in a PSPS, PCS or IPA.

You can read in this white paper why death coverage is important.

Personal accident insurance

Personal accident insurance protects you against the consequences of an accident, both as a private individual and in professional practice. Remember that a self-employed person cannot rely on workers' compensation insurance.

Here you will find everything you need to know about the solutions offered by NN to protect you from certain risks as a self-employed person.