Being self employed and sick can be financially difficult. If you are too ill to carry out your job, you may not be able to collect any income, and yet you may still have personal and business expenses to cover. Whilst employees in some states can sometimes be entitled to sick leave pay, this benefit does not extend to those that are self-employed. As a result, you will need to find other ways of funding yourself when sick. Here are just a few ways to financially survive being self-employed and sick.
Take out income protection insurance
Income protection insurance allows you to keep collecting a regular income when you are too sick to work. In most cases, you can insure about 50% of your salary. Special schemes may exist for those that are self-employed.
Your rates will generally be dependent on your health, your income, your credit score and the nature of your job (certain jobs may come with a higher risk of illness). Unhealthy habits like smoking may also bump up your insurance rates. By shopping around, you may be able to save money.
Some health insurance schemes may include income protection or you may able to add it as an extra. This could be cheaper than taking out a separate income protection scheme, but you may not get as much cover.
Start a savings account
It is useful to have savings set aside that you can use in an emergency. This could be money to rely on when you are ill, as well helping to fund other unexpected costs such as home repairs, medical bills and car repairs. Just make sure that you only dip into these savings if it is a true emergency.
Relying on a savings account could be cheaper in the long run than taking out insurance, although you may still struggle to fund yourself through long-term sickness unless you are able to save up a huge amount. By putting money into a high interest account, you may be able to naturally generate some earnings, also turning it into a passive income stream.
Set up passive income streams
A passive income is an income that doesn’t require too much hands-on work. They usually involve an initial investment, after which you will automatically earn money from them each month.
Renting out a property to tenants is a popular example of a passive income. By choosing a property in good condition and taking on good tenants that regularly pay their rent, you can earn a steady income each month without having to do much work. This could be ideal for keeping some money coming in when you are ill.
Other investments that may similarly earn money from month to month could include high interest savings and peer-to-peer lending.
There may also be other ways of earning some extra income without putting in too much work such as selling clutter in your home or taking on odd jobs online. These may not require any initial investment and could be something to rely on. That said, you need to be certain that your health permits you to carry out these tasks – some people may be too ill to use a computer or too ill to sift through their clutter.
Research into your eligible benefits
There may be benefits that you can take out whilst ill to help fund you. These can vary from state to state.
In the case of long-term sickness, you may be eligible for disability benefits. This could include anything from spinal problems to cancer to lung disease. You may need medical proof of a condition when applying to these benefits.
Seek legal compensation
If you were made ill through the fault of someone else, it is possible that you may be able to claim legal compensation.
For instance, you may want to seek legal compensation for a car accident injury or an injury caused as a result of medical malpractice. A lawyer will be able to help you argue your case. Some of this compensation money could be used to fund yourself whilst you are unable to work.
Create an autonomous business
Another option could be to build your business up so that it can keep running and keep making profit without too much of your own personal intervention. This could involve hiring reliable staff and giving them the power to make decisions by themselves so that your business isn’t reliant on your presence. An example could be a shopkeeper taking on employees that can run their shop in their absence.
You could even hire an assistant manager to take over some of the admin while you are ill. This needs to be someone who you can trust to run your business in your absence. You will also need to be able to pay them enough money for the responsibility that they are taking on. You should give this person thorough training whilst you are still in good health.
Tell your creditors
It could be worth telling your creditors if you are ill and unable to make payments due to not receiving enough income. Your creditors may be sympathetic and they may be able to delay payments for a month or reduce payments temporarily.