Why At The Very Least You Should Have Income Protection When You’re Self-Employed

Downside Risk Protection

Ever been sick since becoming self-employed?

This repost from 2020 was inspired by someone I admire so I decided to put it here.

You could be making $40,000 a month, as successful as you want to be and clerks in these government institutions will still look upon you with this air of pity once it’s understood that you’re self-employed. So if you’ve never paid any attention to HSC as a sole trader, unless you’re willing to hire an employee or register as a limited liability company, technically, you can easily fall ill without coverage from the government for that downtime.

Whatever the reason is for that disregard, once you’re a 1–3 man show in Trinidad and Tobago if you wish to be prepared for unforeseen circumstances, you’ll have to research alternative methods to afford yourself some security for your income.

Speaking from my own experience, I’m aware not every self-employed person equates the stability of their business with income protection. Therefore, this pep talk won’t apply to everyone. However, if you start to see your time as an asset in your potential to make the money you need to put towards building your skills and by extension your business, protecting it would be your first priority. I’m also aware health insurance can feel like an unnecessary overhead and you’ll try to avoid it as much as possible for different but valid reasons. But, If we’ve learned anything from what’s currently going on in the world, it’s that our plans don’t stop life from occurring. Moreover, without a way to protect the money that’s coming in, you defeat the purpose of doing things like “not having employees”, or “working out of your own home”.

So What Had Happened Was…

I had fallen ill twice since becoming self-employed, and it wasn’t until the second time that I noticed how unprepared my business was to compensate me for the time I could easily lose at any given moment on account of accident or sickness. Thankfully, I recovered quickly (by the grace of God), but I began asking myself one important question. What am I doing with the money I’m earning if I’m in a situation like this and unable to take care of myself? I was so focused on taking courses, saving, and working that I completely took for granted how quickly my earning potential would dwindle without me there to fuel it. And that made me broaden my understanding of what stability in a business is and how deep it goes.

Now, I could easily create a passive income product from my main offering, but I can also just insure my finances. There are definitely options available for me to treat the situation with. But the right option was protecting my income because “there is nothing really passive about creating a passive income product” something people earning passive income constantly lament on. I’m sure as I continue to make smart investments for the growth of my brand and business, I’ll be able to afford my business the added security of having something like that in the future, but right now, the best path for me was…

Individual Insurance

I’d like to preface what I’m about to say with a disclaimer. I’m not a financial advisor, and you should absolutely seek the advice of one for your needs as they may logically vary from mine. While there’s a lot to cover on the topic of individual insurance, for the purpose of this article, I simply wish to introduce you to a simple solution that can keep your assets — your time and your health, protected at this stage of your business.

Sagicor has a package called The Income Protector Plan. One of the many benefits of the plan is that if to varying degrees you become sick, they’ll pay for your inability to work for up to 2 years. But, in order to invest, you’ve got to know the monthly value of your business first so an advisor can calculate how much you can be covered for and your payout total. This peace of mind only costs me $97.00 a month, and my payout in case of a debilitating injury or illness, is $2500.00 a month. So, how do you begin getting the answers for your situation?

Using a simple profit and loss spreadsheet, you can easily keep track of your earnings and determine things like the monthly value of your business as well as what you typically pay yourself. Now, remember this figure is only based on what your business consistently earns. Nothing else matters. So, if you would like to increase what you qualify for, you can look for ways to increase the value of the service you provide that will lead to increased prices. And if you’re wondering how to even begin doing that, my One-Page is perfect for you.

Also, if you’re also having second thoughts, maybe your own home, car, or a small loan to invest in your business might encourage you to insure your business on some level because you can also leverage the insurance with banking institutions to acquire other things. I know things like this are scary when your business is small, it certainly was for me, but the truth is you’re not growing if you don’t take risks. And by virtue of my two experiences with illness, this was a necessary one.

Reach out to me with the hashtag growth, so I can hook you up with my Sagicor 
financial advisor.

I am the Founder and Visual Brand Strategist at The BrandTUB

Sign up to receive these weekly articles in your inbox if you’re not quite ready to work with me yet.

And please share my article if you liked it