Income protection insurance can be the difference between making a stress-free recovery from illness or injury and being forced to sell the family home because you can no longer pay the mortgage. Life insurance policies can take care of loved ones in the case of death but they don’t help with mortgage or loan payments if a breadwinner is temporarily unable to earn a crust due to critical illness or injury.
All working adults should make sure that they understand how much mortgage cover or rental cover and living expenses they will need to be able to support themselves if they are unable to work for an extended period. Most working adults could benefit from unbiased advice from an informed source such as a financial adviser. Even the youngest, healthiest people can fall ill or have an accident and Income Protection Insurance can make the difference between having constant money worries and being able to manage comfortably.
Critical illness or serious injury can mean not only a loss of income but also extra expenses either as a direct result of the illness or due to the fact that the person in question can no longer perform all the activities they could previously manage. Income Protection Insurance can make the difference between having to scrimp and scrape and being able to manage comfortably.
In worst case, serious accidents or long-term illness can force people to sell their homes and/or to default on debts, with all the potential repercussions that implies. Unfair as it may seem, having a good credit record is becoming increasingly important from the perspective of finding and maintaining employment, which means that defaulting on debts due to illness can actually impact a person’s ability to return to work once they are well again.
Income protection insurance can run alongside or instead of payment protection insurance. Although PPI has developed a bad reputation over recent years, like many other products, it can be useful to certain people in certain circumstances. PPI is designed to pay back a specific loan on a short-term basis.
Income-protection insurance provides an income to use as you see fit, although obviously, maintaining payments on outstanding debts will have to factor into your calculations when deciding on the cover your require.
In short, while most people go through their working lives without having any sort of serious accident or illness, the potential repercussions for those who are unlucky are significant, while the effort of getting good advice is minimal.