Most of us just assume that we will always remain fit and healthy and never have an accident or illness that could prevent us from working. But if you weren’t so fortunate, just consider what provision you currently have in place, if any.

As an employee you may be entitled to Statutory Sick Pay, but only if the qualifying conditions are met. Alternatively, you may be eligible for state benefits in the form of Incapacity Benefit (short and/or long-term). But there’s no guarantee that you would receive any state assistance. And, even if you did, would it be sufficient if there were no other provision from your employer? If you are self-employed, the situation could be considerably worse.

Monthly income
Income protection insurance can be taken out if you are employed, self-employed or a ‘house person’. It provides you with a monthly income based on a percentage of your earned income if an illness, accident or injury stops you from working for an extended period. It typically continues to pay a benefit amount until you return to work or reach retirement age.

Meeting your needs
There are different types of income protection contracts. But typically the benefit is based on a percentage of your income and most contracts let you choose whether the amount paid will stay the same or automatically increase each year in line with a fixed percentage or recognised index. You can also choose when you want to start receiving the benefit after stopping work. Some contracts will also continue to pay you a reduced amount if you return to work but have to take a lower-paid job.

Without your income, severe financial hardship could soon follow. So, if you want peace of mind and would like to assess your current position, please e-mail or contact us for an independent review of your situation.

The Financial Services Authority does not regulate some forms of income protection.