Nobody wants to worry about how they'll pay their mortgage, rent or bills if you get sick or injured and can't work. However, over the course of a year (pre-Covid), around 1.4m working-aged people have at least one sickness absence lasting four weeks or longer – that’s 1 in 25 people employed.

If something happened to you, would you be able to survive on savings, or on sick pay from work (at a current statutory rate of £96.35 per week)? If you think being off work for a month or more, due to accident or illness, would be a significant financial risk and you’d need some other way to keep paying the bills, you might want to consider income protection insurance.

Some say income protection is an everyday essential – because it works when you can’t.

Having income protection insurance could help you rest a bit easier, safe in the knowledge that you'll still get an income if you're off work because of illness or injury – as you would have enough money to get by and maintain the home and lifestyle you’ve worked so hard for.

There are different types of policy available to protect your income, but generally speaking you pay a monthly premium, and if you are unable to work (as per the terms and conditions of your policy) the insurer will pay you a regular income until you can either return to work, the benefit payment term ends (if there’s a fixed period), you pass away, or the policy ends. Income protection policies pay you a tax-free income after a specified (deferred) period of being unable to work – this could be after a few weeks, but some plans pay out from as early as the first day of being off work.

Different insurers offer different reimbursements, and some offer additional benefits or support services to help you cope with hospitalisation, rehabilitation, recuperation and return to work. For example, LV= will pay a regular benefit of up to 60% of your income and Royal London cover up to 65% of the first £15,000 of your pre-tax earnings, plus up to 55% of the remainder, up to £250,000 a year – and they also include fracture cover and hospitalisation payment as standard. Zurich make monthly payments to cover up to 80% of your take home pay – and offer a return-to-work package which means if you return to work but earn less than your normal salary, they'll top up some of the difference for up to two years.

It might seem complicated to work out which plan would be best for you, but here at Essential Insurance our experts will help you decide which policy will meet your own needs. We’ll consider your savings, how long your employer will continue to pay you and what state benefits you may get after your employer payments stop. We’ll also help you to decide how much money you’ll get if you claim, how long your policy will last and how long the deferred period should be. We’ve got the experience and know-how to get the right policy for you.

When you need it most, income protection provides a financial safety net and breathing space for you to focus on getting better and getting back to work, as Gavin* found out.

In 2017 Gavin’s wife, Avril, was diagnosed with breast cancer. After having surgery to treat the cancer, she was initially given the all-clear. But then within a very short space of time it was revealed that the cancer had spread to Avril’s lungs and had become terminal. At this point Gavin, a truck driver, was signed off work due to the anxiety following his wife’s terminal diagnosis, and in 2018, on the day of his seven-year-old son’s birthday, tragically Avril passed away. Gavin credits the income protection benefit he received from his short-term income protection product as an important solace during this incredibly difficult time for him and his young family. His policy had a one-year benefit period with a weekly benefit amount of £272.92 based on a retirement age of 68. After claiming on his policy for seven months, Gavin returned to work and is very grateful for the support provided to financially support him throughout this dreadful time. Gavin said, “The most important thing to me through this was having that income protection payment safety net. If I hadn’t had this in place, I would only have been getting SSP… and that wouldn’t have been enough to run the house, for me to stay off work… caring for my wife before I lost her.”

Which? the UK’s consumer champion say that income protection is “the one protection product every working UK adult should consider buying”. For advice and a recommendation about which income protection policy will best suit your needs, contact our income protection experts here at Essential Insurance on 0800 612 8005.

*Name changed. Image for illustration. 
Credit with thanks: Gavin's story shared by The Chartered Insurance Institute.