coffeeIt’s sometimes tricky being a freelancer. You’re in charge of doing all the work, of getting yourself organised, of doing your accounts, sorting out your own technical support, but for me, the most difficult part is to plan for life’s mishaps in the absence of a benefits package which might include sickness or critical illness cover.
When I started out 14 years ago, I was very concerned that an accident might stop me working and abruptly put an end to my income. You see, I’ve always played a lot of football, where one can easily dislocate or break something and lose some or all productivity. Plus I have a habit of falling upstairs (rarely down, don’t ask me why). So I immediately took income protection insurance, which guarantees that if I am unable to work for a lengthy period of time, I will get a monthly amount until I’m able to start working again. As it happens, the worst that’s happened to me since was a few cuts on my forehead after stopping a particularly fierce effort at goal with my face, but it has been a comfort knowing that I’d still be able to afford decent cheese if I broke my wrist after tripping myself up.
Then I turned 40 towards the end of last year. I thought it was time I reviewed my financial situation, and I realised that what worked for me 14 years ago was no longer adequate. To put it simply, I was worried that my partner would lose our home if I fell gravely ill and/or died sooner than expected. So I talked to one of my friends and coworkers, who is a financial adviser, and we went through my options. I was planning on getting life insurance, as it’s the only product I had heard about, but she helpfully told me that I have more chance to develop a horrible disease than to die, so I ended up taking a combined critical illness and life policy. This ensures that if I get very ill, I’ll get a tax-free sum, which I can blow on expensive restaurants and beautiful golf courses use to focus on getting better, and in the worst-case scenario, the rest gets paid to my partner when I die. She intends to use some of it to go on a round-the-world cruise, which is nice to know.
Of course, this is what works for me, but the right decision depends on everyone’s particular circumstances, so here are a few links you might find useful:
Definition of critical illness insurance
Definition of life insurance
Critical illness or income protection insurance?
Critical illness insurance: The neglected cover that could be crucial
Should I get critical illness cover?