How to protect your salary with Income Protection

18.03.2020

The impact of the coronavirus pandemic has shocked Europe. With the fast rise in cases leading to school closures, food shortages, travel restrictions and entire countries in lockdown. Staying healthy and safe is the most important thing at this time, but these decisions have not been made lightly. The economic fallout from the pandemic will be enormous, with many industries such as tourism and hospitality already suffering huge losses. While most governments have put in measures to protect workers’ incomes, generally these don’t extend to the continent’s 32 million self-employed workers, who risk losing all their income while in isolation. Most freelancers have no insurance or income protection, and the pandemic is showing how quickly people struggle when out-of-work. Income protection is a peer-to-peer alternative to traditional insurance, which is an ideal alternative for freelancers, here’s how it works.

What is Income Protection?

Income protection is VouchForMe’s alternative to traditional disability insurance. There’s no premium to pay, income protection works by having groups of workers pooling a small amount of their income into a ‘pot’ With a group of 20–50 contributing, this pot grows quickly. So if one day you find yourself unable to work due to an accident, or illness, you will continue to receive a payout by drawing funds from the pot. Hopefully, you won’t need it, but if you do it’s there. Think of it as a safety net. Which will continue to pay out for two years, ensuring you can rest and recover, without the stress of worrying about your bills.

Payouts are predefined by the monthly contribution:

  • 25 EUR monthly contribution ⇒ 750 EUR monthly payout
  • 50 EUR monthly contribution ⇒ 1000 EUR monthly payout
  • 75 EUR monthly contribution ⇒ 1500 EUR monthly payout
  • 100 EUR monthly contribution ⇒ 2000 EUR monthly payout

I’m employed, but my sick pay isn’t that good, can you cover me?

Of course. Income protection isn’t just for freelancers, anyone who wants to build a safety net can make use of it, it’s a great way to top up your sick pay, and help you maintain your lifestyle.

What if I never need it?

When we say there’s no premium, we mean it. The money that you contribute to the pot belongs to you. As VouchForMe records each transaction, you can choose the amount you want to contribute, just bear in mind that the more you put in, the more you can take out in the event of an accident or illness. You can choose to leave the pot at any time, and your contribution will be returned to you minus any potential payouts to group members.

What makes this better than a traditional insurance policy?

Glad you asked. Here are some advantages of VouchForMe’s income protection over traditional insurance;

It’s cheaper

Despite the rise of the freelancer, thanks to the gig-economy and more people wanting to follow their passion, insurance is hard to get. Freelancers are considered high-risk so premiums for sole-traders are high.

It’s quicker

Getting insurance isn’t as straightforward as you’d think, everything is scrutinized, your age, type of business, whether you’ve ever smoked, furthermore despite paying out for premiums, people who fall sick are often subjected to investigation and end up waiting for a payout. With VouchForMe, all we need is proof, such as a doctor’s letter, and once we’ve checked that we’ll start the payout.

It’s your money, you have control

Already the coronavirus has shown that many people aren’t quite as insured as they hope. With many business owners finding that their insurance policy doesn’t cover forced closure, or that they won’t payout for a pandemic, despite the fact that they’ve paid into these policies for years. With income protection, the money is owned by the contributors, providing you have proof that you can’t work, you will be paid.

What will this cost me?

Not much! We charge an initial activation fee of 100 euros, and from then on just five euros per month, which helps us maintain our app, and ensure you have support.

Why do you only cover for two years?

If you fall ill, there’s a 99% chance that you’ll be back at work within two years, which is why we’ve decided to limit our coverage to this time if you want to ensure that you’ll be protected afterward, we’ve partnered with an insurance company, that can offer an extension, as the first two years will be covered by the community, the premium will be heavily discounted.

Does this work? Or is this a fad?

P2P is not a new concept, it’s actually how insurance first started. Small groups of like-minded people would get together and agree to support each other through hard times. The only difference with VouchForMe’s income protection is that we act as an intermediary, ensuring nobody in the group can try and cheat!

Plus it’s really taking off, in the last three years 260 Million people in China have signed up to a P2P policy, with the world’s largest e-commerce company Alibaba driving that growth. It won’t be long till P2P is mainstream in the European and American insurance sector, it’s time to get on board, and ensure your way-of-life is protected.

Sounds great, how do I get it?

The best way to get income protection is to gather some like-minded individuals and fill out the contact form on our website. Then we’ll get you onboard.