Many of us Brits aren’t protected at all should the worst happen to us or if we find ourselves unable to work for a period of time, in fact a staggering 81% of us have no income protection in place, according to the latest State of the Protection Nation report from Royal London.
Should something happen to you or your children that meant you were unable to work and earn an income, not having relevant protection in place could put you and your family under a lot of financial strain.
For those that are lucky enough to have savings and think they will provide the necessary safety net, it is always worth considering how long these will actually last, particularly for the two-fifths of us that have savings of less than £100, according to the Money Advice Service.
According to Legal and General 15 million adults have life insurance which is more than both critical illness and income protection combined, despite there being a much higher chance of being diagnosed with a critical illness or facing long-term absence from work.
Your chances of getting a critical illness also increases with age. According to Macmillan Cancer Support there is an estimated 2.5 million people living with cancer in the UK which highlights the risk of not having critical illness cover.
You might think the state would provide support but applying for benefits can be a complicated and lengthy process. After weeks or possibly months of no income, you might also be surprised at the amount you’d be expected to survive on.
For example, if you meet the criteria for Statutory Sick Pay from the state you can get a depressing £92.05 per week and the state provided Employment and Support Allowance in some cases can pay an even smaller amount. Both are significantly less than the UKs weekly average income which is why seeking specialist advice to ensure you are suitably protected is important.
You are also more likely to be off work with an injury or serious illness for a sustained amount of time than you are to die. According to Royal London, every year people in the UK suffer an injury or serious illness that means they can’t work for a month or more. Your employer might keep paying for you for a while but there may be a limit to how long that will last.
Planning for the inevitable is definitely crucial, but it’s also worth thinking about right now. Building a full protection solution that is tailored to your needs and your budget is incredibly important. Whether you need to prioritise critical illness cover and income protection over life insurance depends on your individual circumstances which is why expert advice is priceless.
If you think you need protection, or think you’re not currently suitably protected, contact one of our advisers today to talk through your options.
Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.