Income protection is one of those things few of us think about until we really need it.
While many people have insurance policies to cover their possessions or their medical needs, many people overlook the importance of protecting their income.
This type of policy can make all the difference if you’re unable to work for a period of time, and it’s something we’ve seen many of our clients benefit from.
Why should you get income protection insurance?
Income protection insurance pays a regular income if you can’t work because of sickness or disability. That financial safety net can be a real benefit, giving you peace of mind that in the event you do fall ill or are involved in an accident, you and your family will be protected.
Back in 2017, we helped one of our clients to set up an income protection plan. As a self-employed bricklayer, he relied heavily on his own physical wellbeing to provide his income. Unfortunately, he had a motorcycle accident this year and suffered a fractured pelvis.
Six weeks after the accident, we’re happy to say he made a successful claim and received his first month’s full benefit.
Without any kind of income protection plan in place, his livelihood would have been at risk. Now, he can take the time he needs to recover without the worry of bringing in an income in the meantime.
These kinds of client stories really go to show how valuable the payout from income protection insurance is – and how you never really know how much you’ll need it until you have to make a claim.
There are many situations where you might benefit from income protection insurance, but it’s particularly worth considering if:
- You’re self-employed. Without an employer, you’re not entitled to benefits like statutory sick pay or holiday pay, and you’re completely reliant on your own ability to work for your income.
- You have dependents, such as children, who rely on your income.
- You have regular payments to meet, such as mortgage repayments and bills.
- You wouldn’t be able to keep up with your regular costs if you couldn’t work for a period of time.
When might you not need income protection insurance?
While income protection is important, it’s not relevant to all circumstances. You might not need this type of plan if:
- You already have insurance through a work benefit. Bear in mind that while employers are required to pay statutory sick pay, this is only paid for up to 28 weeks at £99.35 – so many people will need more than the minimum to cover their expenses during a gap in income.
- You already have other illness insurance. This might be combined with another insurance policy, or in some cases bundled up with other agreements like your mortgage.
- You’re comfortable relying on your savings to cover any gap in income. Think carefully about this, though – if you’re unable to work for a long period, you could end up quickly eating into your savings. This could also create financial problems if another emergency comes up.
Get in touch to talk about income protection insurance.