Whether you run a tech startup, eCommerce brand, global services enterprise or other type of business, entrepreneurship can lead to success, wealth and prestige – so long as you grow your budding enterprise sustainably and strategically.

However, if your startup or the business you’ve founded is your only or primary source of income, it makes sense to protect that income with income protection insurance. In this article, we’ll cover 5 benefits of this type of insurance for global entrepreneurs. So, continue reading to learn how to safeguard your income stream.

1. Safety net if you develop an illness or suffer an injury

The main benefit of income protection insurance for global entrepreneurs is that your income will be secured if you develop a major illness or suffer a severe injury that prevents you from working at your usual capacity.

Most founders work long hours and throw everything they have into the enterprise, relying on it as their only source of income. If you develop a debilitating illness or serious health condition, your working capacity will be severely reduced.

The same applies to a broken limb or other injury where you need to take considerable time off work to recover. An income protection policy will pay you a certain percentage of your monthly income, allowing you to stay afloat, pay the bills and meet the cost of living while you’re on the mend.

2. Financial stability if you need major surgery

Another benefit of income protection insurance is that if you need to take time off work to undergo major surgery, your income will be covered. You might be on a waitlist for a complicated procedure, or require an operation as part of your injury treatment.

This might see you miss weeks of work as you prepare and then recover from the operation. The doctor could order you to rest for two to four weeks, which is a significant chunk of income to lose. With an income protection policy, you receive payments in line with your salary or regular monthly amounts until you’re ready to return to work.

3. You can tailor your policy

Most income protection policies purchased from an insurer can be tailored to your circumstances and needs. For instance, you can opt to pay a higher premium, so your policy will commence payout sooner after you make a successful claim.

Alternatively, reduce your premiums by extending this payout waiting period. Furthermore, you can choose a policy that will pay you income protection benefits for one, two or up to five years.

You can also opt for a stepped policy, where your premiums will start cheaper when you’re younger and rise as you age, as your risk factor of injury and illness increases. With this option, premiums get recalculated based on your age on the anniversary of your policy each year. Or, you might choose a level policy, where the premiums will be set based on your age at the time you took out the policy.

This level of customisation is useful for a global entrepreneur, who will benefit from the personalised approach that can be tailored to their circumstances.

4. Income protection can cover you if your children get sick

As well as customising your policy premiums, you can also add extra features in your policy. One of the features available in some policies is family care coverage. Not all insurers offer it though, so it’s worth researching to see which do.

If you’re a global entrepreneur whose child suffers a serious accident or develops an illness, you may need to take time off from the enterprise in order to care for them full-time.

In most cases, if the parent remains in good health and is capable of earning an income, you usually cannot claim your income protection. But if you get this optional cover, you may be able to stop working to care for your child.

5. Income protection is tax deductible

Depending on where you live, your country may allow you to claim the cost of your income protection premiums on your annual tax return. As an entrepreneur, you need to be savvy when it comes to tax deductions, to reduce your taxable income and maximise any eligible refunds.

Income protection can be an expensive monthly cost, so offsetting this cost against the rest of your taxable income is a nice perk, and can add up along with your other tax deduction claims.

Income protection for global entrepreneurs in summary

As a startup founder, or someone who operates a global enterprise or collaborates on the international stage, ensuring your income is protected is essential to safeguarding your future, such as if you experience a major illness or injury, or if a child falls sick.

Remember: income protection insurance is for you as an individual. If you’re running your own business; you’ll want to consider small business insurance too.

In this article, we’ve explained the benefits, covered customised policies and shown how income protection insurance is tax deductible – to ensure effective tax reduction strategies and maximise potential tax refunds.

Consider income protection insurance to safeguard your career and your future today.