Imagine you are in the midst of an illness that forces you to take an extended break from your work. As a self-employed person, this situation, in addition to putting your well-being at risk, also means facing a number of financial challenges.
At Ambler, We know how important it is to have a strong safety net to get through these difficult times. That’s why we explain all the benefits of taking out sickness insurance for the self-employed and how it can make a big difference to your financial stability.
Social Security coverage and benefits for self-employed workers
When a self-employed person, whether conventional or corporate, is on sick leave, the social security system offers a number of financial benefits. However, these benefits are not always sufficient to cover all personal and professional expenses, especially for the corporate self-employed whose salary can be significantly higher than that of the conventional self-employed. So what is covered for each type of self-employed person?
Temporary incapacity benefit
The financial benefit for temporary incapacity due to common contingencies, which includes illnesses or accidents not related to work, is divided into two phases:
- From day 4 to 20: 60% of the contribution base of the month prior to the sick leave is paid.
- From the 21st day: 75% of the contribution base is paid.
For occupational contingencies, the percentage is 75% from the first day of sick leave. However, the self-employed must continue to pay their social security contributions during sick leave, which further reduces the effective amount they receive. This reduction is more pronounced for those who pay the minimum contribution.
The particularities of the corporate self-employed
For the corporate self-employed, the temporary incapacity benefit follows the same general scheme, but with some special features:
- Coverage from day one: unlike conventional self-employed persons, coverage for corporate self-employed persons starts from the first day of sick leave.
- Contribution basisThe benefit is calculated on the basis of the self-employed person’s self-attributed salary at which he/she is paying contributions. In other words, despite the high contribution base, the benefit may not fully cover the self-employed person’s normal salary.
Why take out sick leave insurance?
Sick leave insurance becomes a strategic necessity for a self-employed company. Why? Let’s take a look at it below:
Protection against insufficiency of social security benefits
As we have mentioned, although Social Security provides a financial basis during temporary sick leave, in many cases this benefit is not sufficient to cover all the usual expenses.
That is why the additional daily compensation offered by sick leave insurance can be essential to make up the difference. This ensures that you can cover your personal needs, maintain your home and continue to support your family, without the constant worry of compromising your financial stability.
Support in the management of business expenses
Can you imagine what it could mean for the running of the company if you are absent for several weeks due to sick leave? This is the difficult situation faced by the self-employed when they are unable to work. However, by having sick leave insurance, you can include cover to help manage these additional expenses, and ensure that the operation of the business is not affected.
Sickness insurance can also include specific cover to help manage business expenses, such as paying employees or suppliers, to ensure that business operations are not disrupted during your absence.
Quality healthcare
Many sick leave insurances, in addition to offering financial compensation, provide access to health care without waiting lists. This means that in the event of illness or accident, you can receive prompt and quality medical treatment, which can speed up your recovery and reduce the impact on your ability to work.
In addition, having access to quality medical care gives you peace of mind in times of illness or accident. Knowing that you are in good hands and will receive the best care available reduces stress and allows you to focus on your recovery rather than worrying about health care issues.
Daily allowance and additional cover
One of the main features of these insurances is that they usually include daily indemnities during hospitalisation, convalescence and similar situations, which extends the coverage beyond the simple financial benefit. In addition, some insurances offer additional coverage such as rehabilitation assistance, specialised treatment and, in extreme cases, death insurance.
Adaptability to different situations
Another of the strengths of this type of insurance is its flexibility, as it can be adapted to different personal and professional situations to offer a wide range of services and benefits to suit the needs of the self-employed.
Tax relief in the annual income tax return
Tax relief is one of the important benefits of sick leave insurance for the self-employed. However, in order for this insurance to be tax deductible in the annual tax return, it is essential to meet certain specific requirements and criteria:
Justification of the link with the professional activity
In order for sick leave insurance to be tax deductible, the insured person must be able to prove that the insurance is directly related to his or her professional activity. This means that the insurance must be aimed at protecting the self-employed person in the context of his or her work, and not simply as a personal or general insurance.
But what documents do I need for justification? This should include copies of the insurance contract, specific policies mentioning the professional field of the insured, and any other documents evidencing that the insurance is designed to cover risks associated with the business activity.
Registration and proof of payment
If you are the type of person who keeps a detailed record of payments made, this will be a great help when taking out insurance. Invoices, receipts and proof of payment should be kept and submitted if necessary. These documents will serve as proof before the tax office to justify the tax deduction.
Correct declaration
In the annual income tax return, sickness insurance should be included in the relevant sections that allow tax deductions for business-related insurance. Make sure you complete the forms correctly and follow the specific instructions of the tax office to avoid errors.
Tailor-made insurance
As a corporate self-employed person, it is very important to think beyond physical well-being and also to consider how to maintain financial stability during critical situations. With additional daily indemnity, comprehensive cover and tax deductibility, a sickness insurance becomes the essential pillar that guarantees your peace of mind.
At Ambler, our commitment to professionalism and excellence drives us to offer the best solutions tailored to each client. We understand the particular needs of the self-employed and work to provide comprehensive coverage that gives you the financial security you need. To find the insurance that best suits your needs, contact us and a member of our team will be happy to help you.
