Yes, critical illness cover for self-employed people is a personal policy you arrange and pay for yourself, because there is no employer scheme to join and no employer sick pay to fall back on. This page covers what a self-employed person has in place of sick pay, how much cover insurers allow, how it fits with life cover, and how premiums and payouts are treated for tax.

Want your own trade, income and health looked at? Send a short enquiry through this page; a broker who is FCA-authorised will ring you back, and it costs nothing.

What replaces sick pay when you work for yourself?

Nothing automatic. Under GOV.UK's eligibility rules for Statutory Sick Pay (read 21 October 2026), SSP is for someone classed as an employee, who has already done some work for their employer and has been ill for one full working day or longer. All three conditions have to be met, and the first is the one that shuts out people who work for themselves: SSP comes through an employer, and someone not classed as an employee has none to pay it.

A critical illness policy is one way people choose to cover that gap. It pays one lump sum when a diagnosis of an illness named in the policy meets that policy's own definition, and how critical illness cover works goes through the definitions. Whether that lump sum earns its premium for you is a judgement the page on whether critical illness cover is worth it helps with. Cover through an employer is a separate topic, covered on group critical illness cover.

Can you buy critical illness cover without an employer scheme?

Yes. Legal & General's critical illness page (undated, read 21 October 2026) sets out who can apply for its policy: a UK resident, aged 67 or younger (minimum 18), and under 75 when the policy ends. None of those conditions mentions how you are employed. That is one insurer's rule; others set their own ages and terms.

Some insurers, Legal & General among them (see below), sell critical illness cover only alongside life cover; whether you can buy it as a policy in its own right is answered on buying critical illness cover on its own.

Applying involves health questions whatever your job. The Consumer Insurance (Disclosure and Representations) Act 2012, in section 2, places a duty on you as the applicant: reasonable care that nothing you tell the insurer misrepresents the facts. What that means in practice is on life insurance disclosure, and a reader with a health condition will find the position on life insurance with medical conditions.

How much critical illness cover can a self-employed person take?

The amount you want comes from your own debts, income and costs, and how much critical illness cover you need sets out that arithmetic. This section is about the other side: what an insurer will accept from someone who works for themselves.

Insurers also cap cover against income, and that page shows one insurer's published cap; that limit is a ceiling, not a suggested sum. For someone who works for themselves, the question underneath is which income the insurer counts.

Scottish Widows answers that in underwriting FAQs written for financial advisers rather than the public (undated, read 21 October 2026). For personal cover, a self-employed person's earnings are their taxable income: what the business brings in after costs and before tax, leaving out any income that would carry on if they could not work. A separate answer, which is about business cover rather than personal cover, says that where earnings are variable, or the client is self-employed, advisers should average them across the last 2-3 years. Other insurers set their own rules, so the same accounts can be read differently by each.

If your profits rise and fall, or the business is still new, a broker can go through how the insurers it works with would look at your figures, and the cost of different amounts, in one free call, which you can ask for through the form here. What generally moves the premium is on what moves the price of critical illness cover.

Should you combine it with life cover?

With some insurers the choice is made for you. Legal & General's critical illness page puts it plainly: "You can’t take out Critical Illness Cover only – it needs to be taken out with a Life Insurance or Decreasing Life Insurance policy." The critical illness amount there may be set below the life amount, never above it. Other insurers' rules differ, so check how a particular policy links the two.

A policy that pays on diagnosis or death is explained on life and critical illness cover. The life cover side of working for yourself, including the routes that depend on whether you are a sole trader or a company director, is on life insurance for the self-employed. If your concern is a mortgage, mortgage protection for the self-employed covers it. Income protection is a different product and a separate question from this page.

How are premiums and payouts taxed?

Premiums first. HMRC's Business Income Manual (page dated April 2016, on own health policies) sets the rule for a sole trader or partner: premiums they pay for life, accident or sickness insurance on themselves or a partner are not allowable deductions when trading profits are worked out. The same rule, as it bears on life cover, is covered in life insurance tax relief. HMRC writes the rule in terms of life, accident or sickness cover rather than critical illness by name, so how it applies to a critical illness policy in your own accounts is a question for HMRC or your accountant. Claiming life cover premiums as a business expense has its own page: is life insurance tax deductible for the self-employed?

Now the payout. HMRC's Insurance Policyholder Taxation Manual (overview page dated 21 April 2022) describes critical illness policies as paying a lump sum when the insured person suffers one of a number of specified diseases. Its reasoning on tax is that a single payment like this is not an annuity, mainly because it does not recur, so it is not taxed as income in the recipient's hands as an annual payment, and no special exemption is needed.

That reasoning is about income tax on the person paid. HMRC's exact words, insurers' own wording, the position for money left in savings or an estate, and policies held in trust or by a company are on whether critical illness payouts are taxable, and a policy a limited company holds is on critical illness cover for business. Tax rules change; this describes HMRC's guidance as it read in October 2026 and is not tax advice.

Frequently asked questions

Can contractors or dentists get critical illness cover?

Contractors and self-employed professionals apply for personal cover like anyone else, and the insurer decides each application. How a particular insurer would see a contractor's pay or a dentist's practice is something the broker can answer for free on a call-back. Death-in-service style cover for a sole trader is on death in service for the self-employed.

Do I need to show my accounts to apply?

It depends on the insurer and the amount. Scottish Widows' underwriting page for advisers asks for no financial evidence on critical illness sums up to £650,000, with further checks on larger amounts. Another insurer may ask for something different.

When you are ready to see what is on offer for your own circumstances, the enquiry box here sets up a free phone call from a broker. More on lump-sum and income cover is in the critical illness and income guides.

Sources