Income Protection an Option for Small Business Operators
Many small business owners don’t take out income protection insurance to cover them if they can’t work. Some are uncertain about the availability of a suitable policy, believing income cover relates more to people who are employed. Others are unsure how they can prove their income to an insurer. But cover is available and, just as it is for an employee with a home loan or other significant debt, it is highly recommended for small business owners.
For those who’ve been operating their business for a reasonable period of time, profit and loss statements or tax returns can be used to prove your income level. Most insurance companies only allow you to insure up to 75 per cent of the income you earn. There are two types of income protection you can take out. Agreed value cover stays the same even if your income fluctuates, while indemnity cover will reduce if your income falls.