Is Income Protection Insurance Worth It?

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What Is Income Protection Insurance?

How It Helps with Financial Stability

Things to Consider Before Taking Out a Policy

Is It Worth It?

Life is full of uncertainties, and being unable to work due to illness or injury can have a serious impact on your finances.

Income protection insurance is designed to provide a regular income if this happens, helping to cover essential expenses while you recover. But is it something you should consider?

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What Is Income Protection Insurance?

Income protection insurance pays out a percentage of your earnings if you’re unable to work because of health issues.

Unlike critical illness cover, which provides a one-off lump sum for specific conditions, this type of insurance offers ongoing payments until you’re able to return to work or reach the end of your policy term.

Policies differ in terms of cover, how soon payments start, and how long they last. Some will provide more comprehensive protection, while others may have exclusions depending on your circumstances.

How It Helps with Financial Stability

Losing your income unexpectedly can put pressure on your finances, especially if you have a mortgage or other financial commitments.

Statutory Sick Pay is often not enough to maintain your usual standard of living, which is why many people look for additional protection.

Self-employed workers and those on commission-based incomes may find income protection particularly useful, as they might not have access to workplace sick pay or other financial support.

Things to Consider Before Taking Out a Policy

• If you have savings or other financial support in place, you might feel comfortable managing short-term income loss without additional cover.
• Some employers offer generous sick pay schemes, which could reduce the need for a separate policy.
• The cost of a policy depends on factors like your age, health, occupation, and how much cover you need. Balancing affordability with the right level of protection is important.

Is It Worth It?

For many people, income protection insurance offers reassurance that their financial commitments can still be met if they are unable to work.

While not everyone will need it, those without a reliable safety net may find it a valuable addition to their financial planning.

Speaking to one of our protection advisors can help you explore your options and find a policy that suits your needs.

If you’d like to discuss how income protection could fit into your overall financial plans, UK Moneyman is here to provide support.