Scottish Widows, which conducted the research, said this was despite business owners spending an average of £9,700 and six-and-a-half months of their lives setting up their ventures.
An estimated one in seven UK workers are now self-employed which means that around 4.4 million people have no protection in place if they were unable to work due to serious illness.
Scottish Widows’ protection research is based on a survey carried out online by Opinium, who interviewed 5,077 adults in the UK in March.
Taking extended sick leave would cost the self-employed an average of £67,550 each per year, amounting to a national financial risk of more than £300 billion annually, says Scottish Widows.
Despite the gap, four in ten (42%) uninsured, self-employed workers insist they don’t need critical illness insurance or don’t see it as a financial priority even though three-quarters (76%) of business owners or partners have no employees and no-one to cover for them should they fall ill and be unable to work themselves.
The average self-employed worker only has enough personal savings to last an average of 9.2 months if they were unable to work and almost two-thirds (62%) say they have no other source of income outside of their business. A third (34%) admit that if they were unable to work due to illness, they would have no other resources or income to rely on.
Johnny Timpson, protection specialist at Scottish Widows, said: “Self-employed workers put immeasurable amounts of time and money into getting their businesses off the ground, but our research reveals that they’re failing to protect their greatest asset - themselves.
“This is particularly concerning when you consider that this workforce has a more limited range of working-age welfare benefits.”