The boring stuff: The types of insurance ALL fitness professionals need
One of the wonderful things about working in the fitness industry is the ability to freelance and be your own boss. You are in control of your own working hours, what clients and gyms you want to work with and can build a business that suits your lifestyle. However, as a freelance business owner you will have some extra things to consider than a full time employee – pensions, tax and insurance. Some of the dryer and more boring parts of adulting, for sure. However, taking control of these areas of your freelance fitness business will make your life easier in the short term and help provide you with a stable future in the long term. You are in control of your own financial future, which can be both liberating and terrifying in equal measure.
This post, the first in a mini series, will delve into the wonderful world of insurance, one of the boring bits of being self-employed. A quick note – I am not a financial planner or tax expert. This series of articles is based on my own experiences and knowledge and should in no way be taken as financial advice. Everybody’s situation is different and what has worked for me might not be the best thing for you at this current point in your life. This article will mainly be helpful for those living and working in the UK. International readers, many of the core principles will still stand but there may be different names for products in your country.
We all know as fitness professionals that we need some sort of public liability insurance to keep us legal to work. But have you considered other insurances to protect your income and wellbeing? There are two main types of insurance that you should be considering as someone who relies on their physical health to earn an income; these are income protection insurance and critical illness cover.
Income protection insurance is designed to pay out if you cannot work due to a serious injury or illness. If you are a full-time freelancer then you won’t receive any statutory sick pay from a job so unless you want to dip into your savings if you get ill, this is a super important policy to have in place. The government does offer employment support benefit but this is only £99.25 a week. Whether you are single or have kids to feed, this will not cover all your outgoings! The policy will ensure you receive a regular income until you reach retirement age or are able to return to work. A good policy will cover most short and long term illnesses and you will be able to claim as many times as you need to on the policy. The fewer illnesses your policy covers, the cheaper your monthly payments will be. The monthly cost will depend on your age, if you smoke, what illnesses are covered, your current health and what percentage of your income you want covered, amongst others. To find the right income protection insurance for you, speak to an insurance broker and ensure they understand the physical nature of your job and can find a policy that will cover injuries like muscle tears and tissue damage, some of the more common instructor ailments!
Critical illness cover is a longer-term insurance product. If you get one of the illnesses insured against, the policy will pay out one tax free lump sum. This can then be used to cover big expenses like paying off your mortgage, clearing debts or making alterations to your home so you can focus on just getting better. Depending on what policy you go for, some illnesses may not be covered so always read the fine print. The most common illnesses covered are heart attack, stroke, cancer and multiple sclerosis. Most policies will also pay out for permanent disabilities as a result of an injury or illness such as blindness or loss of a limb. You won’t be insured for any conditions you knew about before taking out the insurance, so be honest with your broker. It might invalidate your claim otherwise!
The final insurance you need to know about is short term income protection (STIP). This is designed to pay you an agreed amount during a shorter time frame, usually up to a year, when you can’t work because of sickness, injury or redundancy. You will have to wait a set period of time after making a claim to start to receive payments, which will continue until you can go back to work or the policy lapses. Most STIPs won’t cover self-inflicted injuries or conditions you knew about when taking out the policy. With all of the above, it’s best to discuss your individual situation with an insurance broker.
The thing with insurance is that you pay out each month in the hope that you will never need to make a claim, and to some this can feel like a waste of money; especially if cash is a little tight at the minute. However, imagine the worst. Imagine you have just cancelled your critical illness policy and then you are diagnosed with a disease that means you cannot or shouldn’t work. You want to focus your energy on getting better, so if you have to work even a little bit to make sure the bills are paid, that is energy and stress that won’t allow you to recover as quickly as possible. Money stress is the one thing you don’t want when you are battling an illness, so having this cover in place could really be a lifesaver. I hope that nobody reading this ever has to claim on any of the policies I’ve talked about, but wouldn’t it give you more peace of mind knowing that it was there just in case?
I hope you found this article helpful! Next week we will be deep diving into taxes! If you are a fitness professional struggling to take control of your finances then download my e-book "finance and accounting for fitness professionals." If you have any suggestions about what you’d like to see on the blog or any questions about the article pop me an email on firstname.lastname@example.org