Why it matters
A long illness can stop a founder working and drawing an income from the company. Protection pays out so that you and your family can keep meeting your commitments if that happens.
Protection & income cover for startups
Many founders have no sick pay or death-in-service cover from an employer. This guide explains the main types of protection, which are income protection, life cover and critical illness cover, and when each tends to matter.
Founders often have no sick pay or employer benefits, so protection can matter more for them. Income protection replaces part of your earnings if you cannot work, and life cover and critical illness cover protect your family or business partners. A regulated adviser can recommend how much cover you need.
The basics
- Income protection, which replaces part of your earnings if illness or injury stops you working
- Life insurance to protect your family or mortgage
- Critical illness cover, which pays a lump sum if you are seriously ill
- Family income benefit and mortgage protection
- Working out how much cover your commitments need
How to get regulated financial advice
- 1Understand the basics
This page explains what this area involves, so you know which questions to ask an adviser.
- 2Find an authorised adviser
Regulated advice can only come from an FCA-authorised firm. You can search the FCA register, or ask us for an introduction to Equity & General, the firm we have an introducer agreement with.
- 3Decide whether to go ahead
An introduction is free, and you do not have to take one. If you go on to take advice, the adviser explains any fees before any work starts.
Common questions
What is income protection?
A policy that pays you a regular income if you cannot work because of illness or injury. It matters most for people with no sick pay from an employer, which includes many founders. A regulated adviser can recommend the right type and level of cover.
Do I need life insurance as a founder?
If anyone depends on your income, such as a family or a business partner, or you have a mortgage, then usually yes. A regulated adviser can help you work out what cover, if any, you need.
How much does protection cost?
It depends on your age, health and the amount of cover, and premiums are usually lower when cover is taken out while you are young and healthy. A regulated adviser can find cover that fits your budget.
General information only. This page explains a topic in general terms. It is not advice, a personal recommendation or a financial promotion, and it does not invite or encourage you to buy any product or service. Everyone's circumstances are different.
Regulated financial advice can only be given by a firm authorised by the Financial Conduct Authority. You can find one on the FCA register (register.fca.org.uk). Buzz Accounting is not authorised to give regulated financial advice. We have an introducer agreement with Equity & General (E&G), authorised and regulated by the FCA (No. 474163). If you would like an introduction, we can make one.
The value of investments and any income from them can fall as well as rise, and you may get back less than you invested. Your home may be repossessed if you do not keep up repayments on a mortgage. Tax treatment depends on your individual circumstances and may change. Will-writing, trusts and some estate-planning services are not regulated by the Financial Conduct Authority.
