Do You Need Health Cover and Income Protection as a Self-Employed Director?

Quick answer. The mandatory self-employed (TNS) regime poorly covers health and work interruption: limited daily sickness benefits (low amount, short duration), no robust automatic cover for long absence or disability. Complementary health insurance and income protection (work interruption, disability, death) are strongly recommended and often tax-deductible under Article 154 bis of the French Tax Code.

A majority SARL manager or sole proprietor contributes to the self-employed social security scheme covering three risks: health-maternity, disability-death, and retirement. But this mandatory cover remains partial, especially for work interruption and disability.

At Hayot Expertise, we regularly advise owners facing an unexpected absence — surgery, accident, burnout. Without complementary health insurance or income protection, the financial shock is immediate: work income stops, contributions continue, cash flow weakens. One manager we advised had to suspend activity for three months after a herniated disc: the mandatory benefits covered only a fraction of his usual income, and he funded the rest from reserves. With suitable income protection, this scenario would have been transparent to cash flow.

Health-Maternity: Limited Base Cover#

The mandatory regime pays a daily sickness benefit, but it is capped at a low amount: around half of base income, within a daily ceiling of a few dozen euros. For an owner with moderate or high income, this is far too little. Benefits are paid after a waiting period and for a limited duration. Maternity opens specific allowances, but over a framed period.

In practice, for a €60,000 annual income, these benefits cover only a small part of a one-month absence. With activity stopped, personal or business cash must fund the rest.

Disability-Death: Essentially Absent#

The mandatory regime provides no robust disability benefit (lasting income replacement for permanent incapacity). Minimal death cover exists for dependents, often insufficient. If the owner can no longer work, no flow replaces lost turnover: this is the main gap to fill.

Table 1: Mandatory TNS Regime vs. Actual Needs#

Why a Mutuelle for a Self-Employed Person?#

Health insurance is a complementary policy reimbursing healthcare costs (consultations, hospitalization, dental, vision) beyond statutory health insurance. For a self-employed person, it is strongly advised: the base regime reimburses only a fraction of actual costs.

Tax Deductibility (Article 154 bis)#

Premiums paid to health insurance can be deducted from the self-employed person's taxable income, within limits set by Article 154 bis of the Tax Code. The limits depend on your profit and on the annual social security ceiling (PASS), set at €48,060 in 2026. Your accountant computes the deductible amount for your situation. In practice, a €1,500 annual premium can yield a substantial deduction depending on income.

Why It Is Decisive#

Income protection covers:

1. Work interruption (daily benefits beyond the mandatory regime): ill for three months, you receive a share close to your usual income rather than a few dozen euros a day.
2. Permanent disability (annuity or lump sum for lasting incapacity).
3. Death (lump sum or annuity for dependents).

It fills the void left by the mandatory regime.

Key Point: Madelin Retirement Contracts Closed Since 2020#

Important. New Madelin retirement contracts can no longer be taken out since 1 October 2020: they were replaced by the individual PER (retirement savings plan) under the PACTE law. Concretely:

• If you held a Madelin retirement contract before that date, it continues.
• You can no longer open a new Madelin retirement contract: for supplementary retirement, it is now the individual PER.
• However, the deductible income-protection and health components (Article 154 bis) remain available via new contracts, sometimes still called "Madelin" out of habit, though the term is imprecise.

Many owners are unaware of this closure and seek to "take out a Madelin retirement contract." They should be directed to the PER for retirement, while being offered income protection for work interruption and disability.

Deductibility of Income Protection#

Like health insurance, income-protection premiums (work interruption, disability, death) are deductible from the self-employed person's taxable income under Article 154 bis, within limits tied to profit and the PASS. A €2,500 annual premium reduces taxable income accordingly, for a tax saving that depends on your bracket.

1. The Closed Madelin Retirement Trap#

You can no longer take out a Madelin retirement contract since October 2020. For supplementary retirement, turn to the individual PER; for work interruption and disability, to dedicated income protection. Existing contracts, however, continue.

2. Majority SARL Manager, Sole Proprietor, and SAS President#

The majority SARL manager and the sole proprietor fall under the TNS regime and benefit from the Article 154 bis deduction. The SAS president, treated as an employee, follows a different logic (cover carried by the company): the rules differ.

3. Minimum TNS Contributions#

A TNS manager owes minimum contributions even without remuneration. Build this fixed cost into your social-protection budget.

4. Combining with the PER#

You can combine an individual PER (retirement), income protection (work interruption, disability, death), and health insurance. The three cover distinct needs and are deductible within Article 154 bis limits.

1. Check your mandatory cover with the self-employed scheme: benefit amounts, duration, conditions.
2. Simulate a three-month absence: what income loss, what does the base regime cover, what is the gap?
3. Request quotes from two or three TNS-specialist insurers (health and income protection).
4. Calculate the net cost after tax deduction.
5. Compare with your cash: can you self-fund three months of absence?

We see the same reality each year: self-employed owners underestimate the risk of work interruption. While healthy, they delay subscribing. Once an event occurs, it is too late: the insurer applies exclusions or refuses pre-existing conditions.

Another observation: many hesitate between paying for income protection and accumulating cash. It is a false choice. Well-structured protection costs around €1,200 to €2,000 net per year after deduction, and avoids locking up a large reserve for a rare but heavy risk. Better to transfer the risk to an insurer than to freeze cash that would fund growth.

Hayot Expertise Advice. Health insurance and income protection are not luxuries for a self-employed person: they are tools of financial stability. First assess your exact mandatory cover, identify the gaps (long absence, disability), then compare two or three quotes on a net-cost-after-deduction basis. If that cost is moderate relative to your income, subscribe: the day the unexpected strikes, the difference is counted in months of cash preserved.