There are a number of reasons why someone might choose to become self-employed. For some, it is the flexibility that comes with being your own boss. You can set your own hours and work remotely, which can be a great benefit if you have other commitments such as caring for your children or elderly parents. There is also the ability to choose which projects you work on and who you partner with.
For others, it is the simple fact that self-employment can be lucrative. There are many high-paying freelance jobs out there for those who are willing to put in the time and effort to find them.
What comes under self-employed?
The term “self-employed” can apply to a wide range of occupations, from freelance writers and artists to lawyers, insurance agents and consultants. In Singapore, you are considered a self-employed person (SEP) if you perform work for others under a contract of service. The work should go on a per-job basis, where you are paid directly by the client rather than by an employer.
Of course, being self-employed also comes with some unique challenges. While the process of kickstarting self-employment is relatively straightforward, there is one key restriction that applies to self-employment in Singapore: you must be a permanent resident or citizen. For expats interested in doing freelance work in the long run, you may consider either applying for an Entrepass or registering a company in Singapore. Once you have handled the administrative side of things, you can then start striking out on your own.
Becoming self-employed is an exciting time, but it’s important to make sure you’re prepared from a financial standpoint. This is why another key concern for many SEPs is managing risk. Unlike traditional employees, SEPs typically don’t have the same level of job security or protection. This can leave you vulnerable to a number of risks, including financial instability and even legal action. For this reason, it is vital to take precautions and proactively manage these risks by looking into insurance plans.
Types of insurance for self-employed in Singapore
Health insurance
When you work for a company, they typically provide health insurance as part of their employee benefits. This is not the case when you are self-employed. As a result, it is important to have a good health insurance plan in place. Some may choose to go without health insurance when they’re self-employed, but this can be a risky proposition. Without insurance, you would be responsible for 100% of your medical bills.
While health insurance may seem like a significant expense, it is crucial to remember that it is an investment in your health. If you develop a medical condition that requires frequent visits to your general practitioner (GP), the costs of these check-ups can quickly add up. Health insurance can thus help to ensure that you receive the care you need in the event of an illness or injury.
Moreover, if you have a family, going without health insurance can put your loved ones at risk. A critical illness could leave them struggling to pay not only their medical bills but also their day-to-day living expenses. Securing health insurance is therefore an essential part of being self-employed and safeguarding your financial future.
Life insurance
Life insurance is an important consideration for anyone, but it is especially important if you are self-employed. While you may have some savings to fall back on, this may not be enough to cover your long-term needs. Should something happen to you, your family will need to find a way to replace your income. In this case, the life insurance payout will come in handy to cover any outstanding debts or final expenses. This can help to ease the burden on your loved ones during an already difficult time.
There are many different types of life insurance policies available such as term life insurance, so it is important to work with an experienced agent to find the right policy for your needs.
Professional indemnity insurance
Apart from these individual insurance policies, you may also need protection for the type of services you offer. When you work for yourself, you’re responsible for everything – including any mistakes you might make. Whether you are a freelancer handling some legal projects or providing financial advice in Singapore, professional indemnity insurance can provide coverage in the event a client could hold you liable for their losses.
Should you be at fault, professional indemnity insurance can help to cover the costs of legal fees and damages. Without this type of coverage, you could be left financially exposed if something crops up in your business. Having some form of liability insurance in place can minimise the financial risks associated with your work, giving you peace of mind as you pursue your entrepreneurial dreams.
Start planning
By taking the time to select the right policy for your needs, you can have the full assurance that you and your loved ones are protected financially in case of an unexpected setback. Be sure to get in touch with Expat Insurance before making the switch to self-employment in Singapore.
