What if you could no longer invoice?
An accident, an illness, a stay in hospital. For a self-employed person, being off work stops the turnover but not the costs. The state scheme only pays a flat rate. Three solutions combine to maintain your income while you recover.
- 01 Individual accident cover Quick to set up, around the clock.
- 02 Income protection Accident and illness, calculated on your income.
- 03 Key-person cover To carry the company's fixed costs.
The state scheme is not enough
In Belgium a self-employed person unable to work receives nothing for the first month, then a flat-rate benefit from the state scheme. That flat rate is based on a statutory figure, not on your real income. For a consultant who earns well, the gap is brutal.
Meanwhile the costs keep running: social contributions, business rent, leasing, loan repayments, not to mention your own standard of living. Protecting your income turns a health problem into a simple financial interruption rather than a downward spiral.
A consultant who pays themselves €5,000 a month, unable to work for six months. All the amounts below follow from that assumption: over six months, their usual income would come to €30,000.
- M1
- M2
- M3
- M4
- M5
- M6
The first month is not compensated at all, then the state flat rate caps far below your income. The rest is at your expense.
- M1
- M2
- M3
- M4
- M5
- M6
With the waiting period bought back, the first month is compensated retroactively. The benefit then tops up the state flat rate, to between 60% and 90% of your remuneration depending on the insurer.
In this example, six months off work costs €21,000 without cover, against €6,200 with guaranteed income cover and the waiting period bought back. Illustrative figures, calculated on the assumptions above: the exact state flat rate depends on your family situation, and the benefit depends on the policy chosen.
Three solutions, to combine according to your profile
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Option 1
Individual accident cover
Covers incapacity caused by an accident, around the clock, private life as well as work. The benefit goes up to 90% of remuneration, or takes the form of a flat amount. Quick to set up, in a few days, with no heavy medical formalities. Its limit: it does not cover illness.
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Option 2
Income protection
Covers incapacity caused by an accident and by illness. The benefit can cover 60% to 90% of your remuneration depending on the insurer, within the statutory anti-over-insurance limit. It is the broadest protection, with medical formalities on entry.
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Option 3
Key-person cover (keyman)
The benefit is calculated on usual turnover, 60% to 80% depending on the insurer, and is paid to the company to carry the fixed costs. Ideal when you pay yourself a low salary topped up with dividends, a case where guaranteed income alone would fall short.
Covering incapacity, whether temporary or permanent (disability), is the very principle of these policies. The right combination depends on your status and on how you pay yourself.
Three settings that determine your cover
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01
The amount of the benefit
We set the benefit according to your income and your fixed costs, within the insurer's limits. We also choose whether it is indexed: without uprating, a benefit loses value over a long incapacity.
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02
The waiting period, and buying it back
The period before benefit is paid. With the waiting period bought back, as soon as the incapacity passes the threshold you are compensated retroactively from day one.
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03
The duration and the premium waiver
Up to what age, and from what incapacity rate. Worth knowing: while you are unable to work, the insurer often takes over your premiums, which is the premium waiver.
These policies combine well with a supplementary pension (PLCI or EIP) and hospital cover, for a coherent file rather than a stack of policies.
How to judge the quality of disability cover
Two policies can show the same amount and have nothing in common. The clauses to read are not the same depending on the type of policy: choose the one that concerns you.
Here, six clauses make the difference between two policies at the same price. These are the ones we read in the general conditions before giving you a comparison.
- 01 The incapacity rates used Two thresholds govern everything: the rate from which incapacity is compensated, often 25%, and the rate from which it is treated as total incapacity, often 65%. A policy that only pays above 33% leaves out a great many real incapacities.
- 02 The waiting period The period without benefit after the incapacity begins. We look at its length, but above all whether it can be bought back: with buy-back, compensation goes back to day one as soon as the threshold is passed.
- 03 The maximum benefit period For how long is the benefit paid for a single claim? Some policies stop after a few years, where others run to the end age. This is the clause that does the most damage in a long disability.
- 04 The end age The age at which the policy stops covering you: 60, 65 or 67. An end age set too low leaves a gap between the end of cover and your actual pension.
- 05 Psychological conditions Burnout, depression, anxiety disorders: many policies exclude them, sub-limit them or pay benefit for a reduced period. For a consultant these are among the most frequent causes of absence: the clause deserves to be read word for word.
- 06 How the benefit is indexed Two things to distinguish: indexation of the benefit before a claim, which follows the rise in your income, and its uprating while benefit is being paid. Without the second, a benefit mechanically loses value over an incapacity lasting several years.
Our method: we ask for the general conditions, not just the price. A premium 10% cheaper with an end age of 60, a limited benefit period and psychological conditions excluded is not a better offer: it is different cover.
Strengths to look for, pitfalls to avoid
- ✓ Benefit paid from a low incapacity rate
- ✓ Buy-back of the waiting period
- ✓ Premium waiver while you are unable to work
- ✓ Uprating, or indexation, of the benefit
- ✓ Premiums deductible as business expenses
- ✕ A waiting period too long for your cash flow
- ✕ Broad medical exclusions, back and mental health in particular
- ✕ A benefit set too low to cover your costs
- ✕ Too strict a definition of incapacity
- ✕ No indexation on a long-term policy
Protecting your income: your questions
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What is the difference between guaranteed income cover and the state benefit?
The state scheme pays a flat-rate benefit, often well below your real income, and only after a waiting period. Guaranteed income cover is a private policy that tops up that flat rate to maintain your income level and cover your fixed costs while you are unable to work.
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What is buying back the waiting period?
The waiting period is the time, after the incapacity begins, without any benefit. With buy-back of the waiting period, as soon as the incapacity passes a threshold, thirty days for instance, benefit is paid retroactively from day one. Without buy-back, nothing is due during the waiting period you chose. It is a trade-off between premium and cash-flow comfort.
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Is taking out the policy complicated?
As soon as incapacity caused by illness is covered, the insurer asks for medical formalities that can be heavy: a detailed health questionnaire, examinations, sometimes a visit to a medical centre. Allow time for it. Individual accident cover, which only covers accidents, is set up far more quickly.
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Are the premiums deductible?
In most cases the premiums of these business policies are deductible as business expenses, and any benefit is then taxable. It depends on your status. We go through it with you, and with your accountant if need be.
Complete your protection
Put your income out of harm's way.
One conversation is enough to choose the right solutions, the right benefit and the right waiting period.