Income protection Updated:
It's always nice to have a financial safety net, but unfortunately it seems that far too few people value that kind of protection. Figures show that just 10% of the UK population has income protection, despite the fact that 90% could benefit from it, meaning a huge proportion of working adults don't have any form of financial backup should they be unable to work.
It's a startling realisation. Protection should always come first and yet the sales figure show that it really doesn't, and that means a lot of people could end up struggling. What would you do if you couldn't work due to ill health? Could you afford the bills? It's not a nice thought and many of us take a distinctly ostrich-like approach to it, but that can do more harm than good.
If your income stream was switched off it could have far-ranging financial consequences. Debt could quickly follow, and in the most extreme cases it could be difficult to keep a roof over your – and your family's – head. This, really, is why income protection should come first.
This type of insurance will provide a valuable safety net, with it paying out regular monthly amounts should you be unable to work. Unlike other forms of critical illness cover it doesn't pay out a lump sum, but will instead keep your income stream going for the foreseeable. Hopefully you'll never need it but it's always nice to know you've got it there – it's all about protection after all.
Happily it seems that people are slowly becoming more aware of this kind of insurance, particularly with the likes of the Income Protection Task Force's campaign getting plenty of media coverage. The campaign itself is set to launch in September, but in the meantime make sure to read our special brief from LV= to find out more about income protection and why it should be at the top of the agenda.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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