Income Protection: offering security in uncertain times

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April 08, 2021 - Kevin Dunn

Income Protection: offering security in uncertain times

Covid has meant that many of us are looking at ways to navigate the future and to shape a life around living with a constantly evolving virus. How we live, work and even celebrate life’s happiest and saddest moments has, and is changing.

As financial advisers we are constantly being asked how to best prepare financially when there is so much uncertainty. At the moment, one of the greatest concerns for our clients who are in their working years is a loss of income.

Income protection has been one insurance policy that in the past, some have felt was a luxury and that they could manage without. Many people felt that Government sick pay would pay out some money if they were desperate, or that their career or job skills were versatile enough that they would always find work. Yet the pandemic has meant that many people have been affected by furloughs or reduced working hours, and redundancies have been made on an unprecedented scale. Those who have been the most vulnerable have been the self-employed who don’t have the protection benefits often provided by an employer.

Ensuring that life carries on when the worst happens is the cornerstone of good financial planning, and protecting your income against long term absence from work is an essential part of that.

Many people have wrongly assumed that because of the pandemic, they can’t currently buy income protection insurance. But that simply is not the case: income protection insurance continues to be readily available. In fact, now has never been a better time to make sure that, no matter what happens in the future, your income is protected.

What does income protection insurance provide?

Income protection insurance pays you a regular income in the event that you are unable to work. Some policies cover for illness and injury, while others cover for unemployment too, so you can continue to pay your important bills and concentrate on getting better or finding a new job.

An income protection policy pays out for either a short or a long time period, depending on the type of plan you buy. A short-term income protection insurance plan can cover you for involuntary redundancy, but it’s normally limited to a set time period. For example, the policy will pay you an agreed sum for 12 months, or 2 years. For long-term income protection insurance, providers will usually cover you until you return to work, retire, or pass away, or it covers you until the income protection cover ends.

There are a number of insurance providers that provide income protection cover and each policy offers different benefits. Not all income protection policies are the same. It is important you understand the benefits and the limitations of a policy before you buy it.

Can I afford income protection insurance?

An income protection plan can cost from as little as £10 per month, but can cost more than £80 per month, depending on your situation and the amount of coverage you need.

Age can affect the cost of a policy, as the older you are the more expensive premiums typically cost. Income Protection cover is also priced based on the amount of income you are insuring and the amount of time you want the policy to continue to pay out in the event of you making a claim. Your occupation will also effect whether or not you are eligible for cover and your premium.

There are other choices you have when arranging a policy. Guaranteed policies have fixed monthly premiums. That means you know exactly what you’ll have to pay each month for your income protection cover. Reviewable policies let you change your level of income protection insurance after a set term. Age-related policies are when the premiums increase as you get older.

There are lots of options available when it comes to arranging an income protection policy. A financial adviser can help you chose the best income protection insurance policy for your needs, not just the policy that offers the cheapest monthly premiums. They will make sure you get tailor-made cover that fits your lifestyle and health, so you can feel confident you have the best protection policy in place for your personal situation.

Arranging insurance cover

During these difficult times with an income protection policy in place it is reassuring to know that you will have money to fall back on should you become ill, get injured or lose your job.

It’s also a good time to consider a life insurance policy so that your family will be looked after should you suffer a serious illness or pass away.

If you want to find out more about income protection and get a quote for a policy, call our team at Furnley House on 0116 269 6311 or email


Our blog is for your general interest. Whether or not it applies to your current financial position, please feel free to share it with friends, family, or colleagues who may be interested.