Our research tells us that 48% of 25-44 year olds are considering taking out income protection following the pandemic. However, nearly 1 in 5 have never heard of it. So what is it, and why would you consider it?
If we’ve learned anything from the last year, it’s that life can be unpredictable. You never know what’s around the corner and it can be wise to have arrangements in place should life throw you a curveball.
The challenges of the pandemic and lockdowns have made many people re-evaluate their priorities and spending habits. It’s been a bit of an eye-opener for some to see just how vulnerable our income and finances can be. As a result, some 48% of 25-44 year olds are now considering taking out income protection insurance as one of the ways to safeguard their finances.
But nearly one in five (19%) 25-44 years olds without this type of cover told us they had never heard of income protection. So, let’s take a closer look at what it is and why you might consider it.
Income protection insurance helps you prepare for the unpredictable. If you find yourself unable to work due to sickness or accident, income protection insurance will pay you a regular income while you are off. This could be due to an illness, mental health or a physical health condition. According to the ABI, one million workers a year find themselves unable to work due to a serious illness or injury.
Income protection is designed to minimise the impact ill-health can have and support you and your family’s current lifestyle and financial commitments whilst you’re unable to work.
While you are unable to do your job, income protection pays an on-going benefit to replace part of your income, usually between 50-70%. This can help you keep up with your financial commitments while you recover.
It’s important to know that income protection only covers you for sickness or accident; it would not pay out if you were made redundant.
Income protection might not be for everyone. You might have enough savings to support yourself if you were off work for an extended period. Or perhaps your household income can cover your outgoings until you are able to return to your job. But for many, an extended time off work could mean struggling to pay the bills and that’s why you might consider this type of insurance.
It’s wise to be familiar with your company’s sick pay policy. What would you receive and for how long? If you were unable to work for some time, this might not provide the financial support you need. And it you’re self-employed, you won’t have sick pay to fall back on at all.
Most income protection providers also offer additional benefits which are well worth a look. Our own income protection comes with benefits such as rehab support, fracture cover and parent and child cover. We also offer LV= Doctor Services at no extra cost. This can provide remote GP appointments 24/7, second opinions and prescriptions.
There is a variety of cover available so it’s best to take some advice on which protection products are right for you. We've chosen to partner with LifeSearch to offer you independent advice on which protection products might be suitable for your individual circumstances. You can give them a call on 0800 072 1257. Learn more about income protection and how to get advice
LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in March 2021.