If you were unable to work, due to sickness or injury, could your franchise business survive?
Nobody can predict the future. And no matter how good you are with your finances, the unexpected can, and occasionally does happen. You may have stopped working, but the bills won’t stop arriving!
We all hope it will never happen but what if it does…what protection would you have if you were self-employed? As a franchise owner you need to look after yourself and arrange your own insurance protection.
Here is an example of a typical claims experience * :
“People are 26-times more likely to be incapacitated and off work for more than 6 months, than to die before the age of 65” *
“4 out of 5 adults will experience back pain at some time in their lives” **
Here are two types of protection insurances that you could consider:
It is a sad fact of life that every one of us has a one in four chance of falling ill during our working lives – winding up in a position where income protection insurance would prove invaluable.
Income Protection Insurance is designed to protect against loss of income due to injury, long-term sickness or involuntary unemployment provided these elements have been selected for inclusion in the policy.
It aims to provide you with a regular tax-free replacement income during the time you are unable to work to help pay your monthly living costs such as mortgage/rent, council tax, utility bills, loans etc.
(Stats from Friends Provident, August 2006)
| SEX | OCCUPATION | CAUSE OF DISABILITY | TOTAL PAID | DURATION (WEEKS) |
|---|---|---|---|---|
| M | Chemical Process Operator | Depression | £147,369 | 739 |
| F | Manager | Cancer | £210,108 | 200 |
| M | Sign-maker | Road Traffic Collision | £ 107,036 | 847 |
| F | Secretary | Rheumatoid Arthritis | £129,363 | 726 |
| M | Administration Manager | Anxiety | £175,657 | 925 |
| F | Solicitor | Respiratory Infection | £194,335 | 706 |
| M | Factory Worker | Accident | £42,692 | 372 |
| F | Nurse | Heart Disease | £97,721 | 520 |
| M | Administrator | ME | £204,067 | 598 |
In the UK, over two million people are claiming state incapacity benefit for six months or more because of illness or disability ¹. This fact alone makes critical illness cover an essential consideration, especially for the self-employed.
Critical Illness Insurance is designed to pay out a one-off tax-free lump sum in the event that you are diagnosed with a serious or critical illness. There are limits placed on the conditions which are covered by Critical Illness policies and that as a result not all critical illnesses are covered under all policies and customers should check this prior to purchase.
This lump sum could provide for:
(Stats from Friends Provident, year ending 2005)
| SEX | AGE | REASON FOR CLAIM | PREMIUMS PAID | PAID ON CLAIM |
|---|---|---|---|---|
| F | 50 | Major Organ Transplant | £12,896 | £30,083 |
| M | 49 | Multiple Sclerosis | £1,477 | £13,200 |
| M | 44 | Coronary Artery Bypass | £1,936 | £70,594 |
| F | 53 | Breast Cancer | £28,643 | £1,004,437 |
| F | 47 | Heart Attack | £380 | £12,000 |
| M | 43 | Multiple Sclerosis | £3,765 | £100,000 |
¹ IAD information centre, Department of Work and Pensions, taken from 5 percent sample of incapacity benefit claims, June 2005.
Notes
*Source “IAD Information Centre (DWP) 5% sample, 2005.” ONS Annual Abstract of Statistics 2005
**Source “Work Directions, 2004”
The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK
For further information on income protection insurance please contact:
For further information on these insurances, and more, please contact Albannach Financial Management Ltd on 0131 622 4400 (Edinburgh) or 0141 225 6282 (Glasgow). You can also e-mail us advice@albannachfm.co.uk or visit our website www.albannachfm.co.uk
Albannach Financial Management Ltd 10 Melville Street Edinburgh EH3 7NS is authorised and regulated by the Financial Services Authority.
We are entered on the Financial Services Authority Register No 210225 at www.fsa.gov.uk/register. Registered in Scotland No 209706. Registered Office Exchange Tower, 19 Canning Street, Edinburgh, EH3 8EH
Since Albannach began operations as financial advisers we have remained steadfastly independent. We have no allegiance to any financial institutions; neither do we represent other companies or their products. This means that we recommend products from the whole of the market and offer guidance on your personal finances that is totally impartial and dedicated to your and your franchise's best interests.
If you would like to find out more or request further insurance information, please click here
Albannach Supported by:
Jason is a director with Albannach. As well as advising clients, Jason is responsible for the firm’s marketing and branding activities.
Before joining in June 2003, he spent three years with Sedgwick and three years with Friends Provident advising clients on investments, IHT and care planning. His wealth of experience in these areas has been of huge benefit to Albannach’s client base.
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