The one protection policy every working adult in the UK should consider is the very one most of us don’t have – Income Protection.
The biggest financial risk we are exposed to is being unable to work and therefore unable to maintain our home, monthly outgoings and ultimately our lifestyle and financial future.
The first question to ask is how long will my employer pay me if I am unable to work due to accident or illness? For the self-employed this can be even more of an urgent consideration!
Income Protection cover is designed to help you cope if you lose your income as a result of sickness or an accident as it pays to you a monthly income, to help replace some of your lost earnings (up to 55% of your annual income before tax), and helps you and your family cope financially if you can’t work.
You need to select a deferred period (a period of time before the plan pays out following illness) that suits your circumstances and an end date (retirement age for example); this will then calculate the premium you will need to pay to protect your income.
There are various types of policies:
Long Term Income Protection – This type of plan will pay out in the event of an accident or sickness up to retirement or another selected end date e.g. The end of your mortgage term
Budget Income Protection – such a version is available for clients with perhaps a more limited budget but who of course need such cover. This version of the plan will pay out up to a maximum of 2 years buying valuable time to cover outgoings and reassess your finances.
With the cost of raising a family continuing to climb each year it’s unsurprising that it is putting increased pressure on household budgets. Highlighting these costs can help individuals to better manage their finances as well as consider putting income protection measures in place to ensure that they have a secure financial future should they unexpectedly find themselves without a regular income due to accident or illness. Call SN Financial Services on 01905 779697 for advice.
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