Illness or an accident can keep an entrepreneur off work for weeks or months, and state sick pay is rarely enough. See how income protection insurance (a private sick leave) safeguards your budget.
The greatest nightmare for any entrepreneur is an illness or accident that takes them out of paid work for a few weeks, months or even years. Despite paying social security contributions, it is widely known that state sick pay often isn't enough even for basic needs — let alone larger commitments or maintaining your current standard of living. Fortunately, the market has responded, and we can find solutions known as income protection insurance, or insurance against temporary inability to earn a living.
This kind of solution is useful above all for people whose income depends directly on their own work. If the moment you stop working is the moment you stop earning, then a private sick leave policy will provide you with the means to live. It is most often used by owners of small and medium-sized businesses, such as hairdressers, beauticians, dentists, physiotherapists, plumbers, electricians, tattoo artists and personal trainers.
Insurance is never a way to make money. The purpose of a private sick leave policy is to cover your most important needs at the moment when illness or an accident makes you unable to work. The disability benefit is set individually, though it cannot exceed your average monthly income from the last 12 months.
Entrepreneurs avoid formal sick leave like the plague so they can keep their business running. That is why you do not have to be on official sick leave in order to receive the benefit.
Your state of health — confirmed by a medical certificate or other medical documentation — must prevent you from performing your paid work. In other words, if you are a physiotherapist and break your arm, you cannot see patients for several months, so a benefit is due for that period. Another example is loss of speech after a stroke, or partial paralysis on one side of the body. Most professions require clear communication, and even effective work at a computer becomes impossible when you struggle to hold a mug in your hand.
The premium for income protection is an individual matter. It depends mainly on the amount of the benefit, your profession and your age. For a 25-year-old IT specialist, a benefit of PLN 5,000 costs around PLN 100 per month; for a 35-year-old hairdresser, a benefit of PLN 10,000 is roughly PLN 200 per month. Meanwhile, for a 40-year-old tiler, PLN 15,000 of protected income costs about PLN 350. As you can see, these premiums are significantly lower than social security contributions, yet they provide incomparably higher payouts.
I'll leave that to each person's own judgement. But in a situation where our income determines whether we have food to eat and a place to live, I can't imagine it any other way.
It is a period during which, due to your state of health, you are unable to perform your paid work.
Above all, for anyone running a sole proprietorship.
If, based on medical documentation, the insurer determines that you cannot perform your work for an extended period, payment of a monthly benefit is triggered.
Depending on the benefit amount, profession and age, premiums start from a few dozen zloty per month.
Contact an insurance broker who, after a short conversation, will prepare a calculation and submit a policy application.
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