self-employed - illness insurance?

[MorningPurples]

I'm a self-employed tutor. So far I've not had any kind of insurance. I'm single, no dependents, and renting. I've been putting off doing anything about it because I kept thinking that at some point soon I might get a secure job or find a partner or get a mortgage, and that I'd set that kind of thing up then. And if anything happened in the meantime, my parents would probably help. But I'm getting older now, it seems likely I'll be in this job/rental situation longer-term.

So I should get something. But I don't know what - permanent health insurance? Critical illness cover? Income protection? I don't really know what I envisage might happen and what I need covering. I also am terrified of seeing authority-type people like banks and insurance people and so on, always feeling really really really stupid and becoming almost unable to talk, so I want to try and work out the right questions first if I've got to go through with it. I looked on a site that was supposed to help you find an IFA but when I put it looking for that sort of insurance, hardly any results came up. They mostly wanted people who wanted to talk about investments and retirement planning and things that I can't think about right now (I have a very small pension plan already). One firm only wanted clients with £100K to invest or more. And then here's me, hardly making £20K a year, nothing to invest, nothing to get a mortgage on, just wanted to know what I should do about insurance. They'll laugh at me. I can't go in and ask about this sort of thing, just won't be able to talk, and end up in tears. Maybe I can just do it all online, but am worried I'll choose the wrong thing.

And I don't know what sort of medical stuff to declare. I have no real pre-existing conditions, but how do you really know what they count? I've been to the GP zillions of times for all sorts of things, including occasional episodes of back pain, IBS, repetitive strain, anxiety/depression (as a student) etc, as well as just the normal things. All of those things cleared up and I'm fine now, but surely if I ever had them again, they'll say that I had symptoms of them earlier, won't they? But if they're declared, then I'll get huge premiums, even though they were just minor things and I wish I'd never gone about them as they didn't do anything much anyway and they resolved themselves. But they sound bad, and like the kinds of things that would put me at risk for future claims? And what about all the stuff I can't even remember going to the GP for, if I don't mention it, then they'll come back if I ever claim and say "you didn't tell us everything so your claim is invalid", even if it's unrelated, won't they? Maybe I've just heard too many horror stories about people who waste money on insurance that never actually ends up paying out.

Right, first off you need to calm down about it all! It's honestly not anywhere near as complicated as you are making it out to be!

You need to decide what you want cover for. A lot of self employed people I know have bupa (or equivalent) so that if they need an operation they don't have the long waiting times. Critical illness cover can be useful, but is the 1 you MUST read the small print to see what is covered as some policies are excellent, some are awful! Generally the best thing for covering normal (not life threatening) illness would be savings, ideally enough to live on for 6 months.

I would personally not set it up online, if you are dealing with a person you can ask questions rather than reading a million pages online! At the bank I used to work at, you could request an appt with an independent financial adviser rather than one who just works for the bank, I think most will probably offer this service.

Please try not to feel nervous going to speak to someone, I guarantee there will be plenty of people they have seen who understand less than you (the person I dealt with who didn't understand what house insurance was despite having policies in place springs to mind - didn't even know she was paying nearly £40 a month for it!) so please trust me on that, and if they don't make something clear enough for you, tell them!

I'd also recommend talking to someone face to face. Get a personal recommendation from someone you know if you can because that's always better than picking someone at random. Having someone you trust sitting in on the meeting can also help if you find those situations awkward. And state at the outset that you don't want to talk about pensions etc. so that, if they start down that route, you can show them the door. :)

You're right... being single with no dependents or big financial commitments, the worst thing that could probably happen to you would be to become ill to the point where you could no longer work. If you're in the UK you're covered for medical treatment via the NHS, of course, but private medical insurance can get you treated quicker. If you're invalided out for a period of time according to this DWP link on Statutory Sick Pay as a self-employed person you can claim Employment and Support Allowance straight away for a maximum of 28 weeks via form SC1.

For more serious illnesses that keep you out of the workplace for longer, that's when you can consider 'Critical Illness' cover. There are some horror stories around regarding non-payment for undeclared pre-existing conditions but, mostly, as long as you have honestly answered the questions on significant previous illnesses and as long as the conditions of the policy have been properly explained then you should have a valid claim.

Thanks, I'm trying to stay calm about it, but things like this just terrify me. (One reason I've never even bothered trying to find out about a mortgage, besides the fact that I know I can't afford anything round here. Just the actual going in to a bank and having to talk and not knowing what to say/do/ask, getting flustered, and feeling stupid, etc). I hate talking. But I think seeing someone face-to-face would honestly be better, if I could get the nerve, because it just seems so easy to not know what options/levels of cover/fine print choices etc to make. I've nobody to come with me or recommend anyone, so was trying to find a site online that listed the independent ones, but there weren't very many, often in nearby towns rather than here. And then when I googled the websites of a couple of the nearer ones, that's where I found the one that says they wanted clients with £100K+ to invest. I can't shake the feeling that it's such a little thing to go see them about that they won't be interested and feel it's a waste of their time.

I didn't know that banks recommended people though. Even someone to do insurance things not just investments? That's good.

And I didn't know about getting benefits either as a self-employed person, which is useful.

I guess the sort of thing I'm worried about would be getting cancer or something and not working for however many months as a result. And then not being able to just pick up and start back again, as I'd have to build up all my pupils again, which could take a while, even if I were healthy enough to work. And I know that some policies are really dodgy about what they cover, and I'd like someone to walk me through it and choose a good one for me.

Or something longer term that prevented me from working generally long-term, though I don't know whether that's more or less likely than a critical illness, whether permanent health insurance is better value as more likely to pay out, even if it's more expensive than critical illness.

I hadn't really thought about ordinary private health insurance for the sake of speeding up any treatment, though I can see that could be valuable too.

the whole medical declaration bit scares me. I worried about not declaring things that would then make any claim invalid, because I keep hearing about people that happens to, but that would likely make me over-state things to the point where it looks like I have some pre-existing symptoms when I don't! I don't know how detailed the questions are, whether I have to remember everything I've been to the doctor for and how far back, just in case.

And just the whole thing about making the appointment, going in, makes me dead nervous. I don't have a will, mortgage, proper pension, etc just because I'm almost phobic about talking to people like that when I feel I won't know what I'm talking about. The little pension I did set up I ended up doing online, even though I knew it would be better to talk to someone properly, because I was too scared. And yet I'm perfectly intelligent, got a degree, fairly competent about ordinary things - but walking into a bank or an insurance firm or a lawyer's office or something and asking about stuff like this just finishes me.

thank you for the advice. My resolution is to sort this out in January, so I'm just going to have to be brave and try to find someone to go see.

You do sound as though the anxiety is preventing you from taking things forward. Do you struggle in other settings or is it just banking issues that you find difficult? I think it's normal to be nervous when you're outside of your normal environment, making important decisions with someone who - by definition - knows more about it than you do.

You're a tutor... you are employed because you are an expert in a subject that your pupils need help in understanding better. I can't imagine you look down on your pupils for needing that help -although I'm sure some of them are nervous the first time they meet you. I expect, if you're good at what you do, you start by working out what level the pupil is at, set a realistic end goal, pace the lessons appropriately and then check periodically that the pupil is keeping up?

A good mortgage or insurance adviser wants to sell their customer the right product for their needs and is therefore in the same position of working out your requirements, checking your understanding and then recommending alternatives that fit the bill. If you don't earn £100k there's no point showing you a product with a £100k minimum requirement - there will be others. There have been several misselling scandals in recent years and financial institutions are reluctant to get it wrong again

New to Mums net so not sure what should say really. But, I know a very good down to earth financial adviser that will actually ask you the right questions and help you decide what you actually need, He has built his business by referal and never advertises and has been in business 12 years as an independent. so that must say something about him.
He can do this over the phone as he has awesome web based back office systems.
Call
Mark Edwards on 01656 661121

Hope this helps i'm sure he won't make you feel nervous.

Yes I do struggle with anxiety generally, but it is worst with 'officaldom' I guess. Partly I research enough to know that things are not simple and there are so many things to consider (and I over think everything), but then when the person I've gone to see says something in a simplified way for me, I know that it's simplified, but don't feel confident enough to ask the more detailed questions because I don't know enough more to really get into that level of conversation, and feel like I'll sound like an idiot if I try to. And they'll just think I need taking down a few pegs. So then I kind of end up acting like I don't know anything at all, because I can't find the right words for the more difficult questions without at the same time revealing my ignorance. Unfounded worries, I'm sure, but it ends up paralysing me.

But it's good advice to try to remember that they want to make sure I get the right product, and to keep telling myself that they're not looking down at me for not knowing enough. I do rationally know that. Just I get nervous irrationally at the same time. It's the going in, starting the conversation, making sure that I'm seeing the right sort of person for my income level, sort of insurance I want etc etc. that I worry about.

I did look up a couple of possibilities on the internet last night, and sent enquiry emails explaining what I was looking for. Neither firm got back to me today though, but maybe soon. Or maybe they don't do this sort of thing or for lowly teachers like me who haven't much money. But I guess it's better to know that first.

No need to sign anything on the first visit/discussion. Have a friend there to take notes and get paperwork etc.
Then, after the visit, read through, look up information on the web etc so you feel more informed.
Repeat until happy

" Or maybe they don't do this sort of thing or for lowly teachers like me who haven't much money"

You need to stop referring to yourself as a 'lowly teacher' who needs taking down a peg as it's not doing anything positive for your self-esteem and confidence. Instead think of yourself as 'a customer' - a person with money to spend. You may not have millions in the bank but, frankly, who does? The companies you have contacted will be in touch as sure as night follows day. Now they have your e-mail address, you'll probably keep hearing from them. They can't afford to turn down customers and they certainly won't get very far confusing or belittling anyone.

Yeah I guess it's just that I feel generally inadequate and unconfident, and somehow this is one of the areas that it comes out the most. But I'll try to think of myself as having something to offer them - i.e., a customer - and not just vice versa.

Except I heard back from one company today, who agree that this is the sort of thing they do. At £150 per hour. And that setting up something like this would take a minimum of 4 hours to set up. No possible way I can do that. I'm worrying already about affording the £70 a month that my attempts at online quotes suggested would be an approximate amount. Paying to have it sorted out properly would be 8+ months of premiums already. I know it's better to have it sorted properly than to waste the money, and long term that is sensible, but it's just impossible at the moment.

Maybe the other company will get back to me.

That sounds like a very expensive financial adviser!!!.... definitely not appropriate for what you need. Why don't you contact a few of the bigger companies like Aviva or Scottish Widows and ask them to send around a representative? You won't get independent advice that way, of course, but you'd have a few chances at getting all the information culminating in two or three different options to consider. Like getting a quote for house repairs...

I didn't even know companies like scottish widows did insurance like that. I picked them for my pension, just because I'd heard of them, and then did it all online myself. Didn't know they sent people around either. Maybe that would be an idea. I'll do some more googling today.

I just picked Scottish Widows out of the air actually, but I do have life insurance with them so they may have a product suitable for your needs. You're already sounding more positive. (Well, more succinct and less self-doubting which I think is an excellent sign :) ) Good luck

actaully I think I'm feeling less positive, and more relieved that I won't have to do it because it's unaffordable. It feels like I have an excuse now. But I'm trying not to listen to that voice, and still trying to look into it.

i've googled a couple of companies that offer it, but not independent, and it's all done on the phone and sounds just as complicated as going to see someone. Plus I was reading a thing that compared different policies, and it says that so many of the ones you just buy online or through companies that you can call yourself are not really worth much, and by far the best policies are available only through IFAs, like policies from prudential or people like that. So then it's back to the problem of finding someone, and worse, affording it. I hope the one I tried contacting was just extremely expensive and maybe others aren't like that. I just want to put it on the back burner again for however many more years, but I promised myself I'd try to sort it out.

I think I might just give up. The ones I emailed either haven't emailed back or are really expensive. Looking online is overwhelming and I get the feeling that the policies aren't going to be good value or actually cover things if needed, and you still have to phone them or be phoned to set things up, even the non-independent places. And I coudln't bring myself to ask anything at the bank, because it would be the big branch in the town centre. I need to find an independent one that I can afford, I know I do. but maybe I'll have to wait til I have more money.

thanks, I'll try to keep trying I guess. I hate going to the big branch; the little one I usually go to is tiny and doesn't even do things like foreign exchange, and always send you to the big branch for anything else. Maybe it's I don't quite trust them somehow.

I might email a few more of the ones from the IFA list, even if they are in nearby towns - though I live in the main centre for the area, so why I'm not getting any coming up here (apart from the super-expensive ones) and only in the small towns 15 miles away, I don't really know. But maybe they'd be cheaper.

Ask in your local branch, just say that you want to talk to someone about life and critical illness insurance, they will book you an appt and one of their advisers should come out to the small branch for you. Which bank are you with? I used to work for Natwest and (despite many faults!) this was something they were excellent for, as they were happy to accommodate for the customer over things like this.

It's Barclays. I have no idea if they even do things like permanent health or whatever the new term is, income protection maybe.

I would definitely recommend the OP gets Income Protection (also knows as Permanent Health Insurance). You should insure yourself ideally for around 65% of your gross income, and the term of the policy should run until roughly retirement age.

How long could you manage without any income? I ask because you will be asked for a deferred period (the time between when you go sick and when your policy will start to pay out). For most people this will be 3 months because your employer will give you sick pay for this time, but for you it may be necessary for the deferred period to be less (which means the price will go up a bit).

Any more questions just shout!

BTW if you have no dependents then you don't need Life Insurance

thanks, yes it's income protection/permanent health that I'm looking for, not life insurance. I could probabaly manage 6 months if I had to at the moment, but taht's because I have savings that I could use - if I ever bought a house with them (pipe dream!) then that would change. Maybe 3 months is a better idea.

It worries me that they'd find some kind of loophole if I ever tried to claim, some symptom that I'd been to the doctor before about and forgot to mention, and then they'd say it was pre-existing. How do you remember everythign that's ever happened, health-wise?!

But I'm proud of myself, wrote back to one of the companies that I had emailed, to find out a bit more information. And it turns out that the commission that they get on the insurance would quite likely cover all the fees! I hadn't realised that. So even if I do have to pay something, it wouldn't be anywhere near the 4hours x £160 or whatever it was that one of them quoted. So that's a relief.

I had to just stop dealing with it for a bit as I was getting overwhelmed, but I'm going to try to get back on it this week. I filled in the online form for the one that said about commission covering the fees, and sent it back for more information. Nervous but proud of myself.