Is Income Protection Right For Me?

By Vicki Coleman

Some people go through their entire working life without having to take as much as the odd sick day, while some of us seem to pick up every cold and cough going.

It’s largely luck of the draw, but we should all consider putting something in place in case we get struck down by something more serious.

The obvious thing to do is to take out some income protection insurance, but is it really necessary if you’re, say, under 30? Or, one of those of never-get-ill types?

In this article, we look at some of the different scenarios and whether or not income protection is the right financial product for each of them.

Let’s start with, is income protection right for me if…

You’re fit and healthy and under 30?

While the odds of you getting seriously ill are at their lowest when you’re under the age of 30, it’s probably when you’re at your most active – and with that comes the chance of an injury.

Now, income protection provides regular payments that replace part of your income if you’re unable to work due to illness **or **an accident.

All it takes is something to go wrong on a skiing holiday or in a football match for you to be out of action for six weeks (or longer, depending on the nature of the injury).

While you might be able to cope on statutory sickness pay for a couple of weeks – or whatever your employer is prepared to contribute – if you have to pay your mortgage or rent, you won’t want to be without your full income for too much longer.

You live at home?

If you live with parents, for a ‘subsidised’ rent, you can probably get away without full income for a longer period of time.

You might decide that the cost of income protection cover is better invested elsewhere, which is probably the right decision based on the circumstances.

There are plenty of good savings products out there, particularly now the interest rate has risen in the UK, so if you want to be wise with your wonga, invest your time into learning about ISAs.

You have a big savings pot?

If you’ve already accrued a decent savings pot, you may have decided that is going to be your buffer.

However, if you’re out of work for months at a time, due to a long-term illness, those savings are going to be eaten up in no time at all. It’s not fun seeing all that money you’ve saved over the years disappear before your eyes without anything to show for it.

Income protection protects your income to the tune of 50-70% of your pay, which will probably be enough to stop you having to dip into those hard-earned savings.

Income protection can be claimed as many times as you need to while the policy lasts.

Your employer offers sick pay?

Many organisations, like the NHS and councils, would give you your full pay when you’re sick, and have what’s known as an occupational sick pay scheme.

However, if you work for a private company or have been outsourced, you may only be entitled to Statutory Sick Pay (SSP) – the minimum amount the government says employers can pay.

If you earn over £120 per week and are off sick, that amounts to £96.35 per week. This can be paid for up to 28 weeks of sick leave. After this time, you may be entitled to Employment and Support Allowance (ESA) if your employer stops paying SSP.

It all depends on your employer really – and few workers, understandably, sit down to discuss how they would be supported should they fall medium- to long-term sick.

Income protection payments would be in addition to SSP or ESA, so you might not be far off your regular income when the two are combined – allowing you to recover in the comfort of knowing that you’re secure financially.

You’re self-employed?

As someone who is self-employed, you won’t need any reminding that you’re not able to claim government support via SSP. You may be eligible for an ESA, but this is likely to be significantly less than your salary (up to £117.60 a week) and can take three months to process.

You may have savings in place or be able to take money out of the business, but do you really want to have to do that?

For many self-employed people, income protection gives them a financial safety net if they are able to work for a period of time.

It not only provides a level of protection for you but also your business. You’ve worked hard to go it alone and support yourself – it can be cruel if illness or injury undoes all that.

So, is income protection a worthwhile investment for you?

These are very much broad scenarios and will differ from your unique personal circumstances. However, we hope that they’ve got you thinking a little a bit about whether income protection is something you should invest in.

To help you make your mind up further, why not generate some quotes? It couldn’t be simpler – just provide us with a few details and we’ll do the rest.

If you don’t wish to proceed with any of the quotes, no problem – you can rest assured your information will be stored securely and won’t be shared without permission. In other words, you won’t be bugged by insurance providers if you decide income protection insurance isn’t for you!

So, what do you have to lose? Compare income protection insurance quotes via QuoteSearch today.