At Oportfolio, we know that success in life is only really possible when you have financial security – and in a competitive and challenging economic environment, that can be hard to come by.
Very little in life is predictable, so it pays to consider all possible eventualities and make a plan that insulates you as much as possible from the worst that life can throw at you.
We live in uncertain times in economic terms and for most of us the concept of a job for life is a thing of the past. Equally, while we may be in good health now, circumstances can change quickly as we age.
Yet knowing that your employment might be affected by a future illness, an accident or an uncertain job market at least means you can make plans that can safeguard your financial security should you suddenly find yourself out of work.
Two of the most familiar insurance products that protect your personal finances are income protection insurance (also known as income replacement insurance) and critical illness cover (also known as Cancer Cover).
Both cover similar ground, but neither one is suitable as a catch-all for every circumstance where your employment circumstances might change.
Income protection cover is an insurance product that will give you a tax-free income should you find yourself unable to work either permanently or temporarily for any valid reason specified in the policy.
Typically, these payments would equate to somewhere between 60% and 75% of your salary, depending on the terms of the specific policy.
If you’re able to return to work, these payments will cease; however, cover (and premiums) will usually continue, meaning that most policies of this type allow for multiple claims.
The cost of covering your salary should you find yourself out of work will vary depending on the amount of income you wish to protect – inevitably, the cost of replacing a salary of £75,000 is going to be more than a policy that covers an income of £25,000.
Income protection insurance is different to critical illness insurance (Cancer Cover) and premiums are generally significantly cheaper. You can find out more about critical illness cover here.
Do I need Income Protection?
Most companies offer some level of financial support for employees when they can’t work, but typically this assistance is available for a limited period. Government assistance through benefits are designed to offer some sort of help, but these would be unlikely to cover the financial commitments of a high earning individual.
At Oportfolio, we’ll work closely with you to help you to identify the advantages and disadvantages of both types of insurance and recommend the best solution for you personally.
Knowing you and your family are protected when times get tough is great for protecting your success in life – but deciding the best way of doing that requires expert knowledge and advice.
Contact us to find out more about income protection insurance and how it might help to give you peace of mind over your future financial security.