Do I really need income protection?

This is the question I hear most often when insurance comes up in conversations with families across Bristol and North Somerset. And I understand why people ask it, because insurance feels different from other financial planning. It can feel like you're being 'sold to'
rather than being advised.

But if you don't have the right protection in place when something goes wrong, the financial impact on your family can be severe.

The good news is that sorting this out is simpler than most people expect. Here's what you need to think about.

The conversation that gets put off

Most people have some insurance in place. When you took out your mortgage, your broker probably talked you through life cover. You may have ticked a box on a workplace scheme. And because something exists, it's easy to assume you're covered.

The cover you set up at 35 was based on your life at 35. Your mortgage was a certain size, your income was a certain level, your children were a certain age. If any of that has changed, and it almost certainly has, your protection may no longer fit.

This is the conversation that keeps getting pushed down the list. It doesn't feel urgent until it is. And unfortunately, by then it's often too late.

What types of protection should every family think about?

There are four main types of protection, and each one covers a different scenario.

1. Life cover alongside your mortgage – a decreasing term policy that pays off your mortgage if you die. You're no longer legally required to have one, and it's your choice, but it's strongly recommended. If your family would struggle to keep the house without your income, it deserves serious consideration.
2. Life assurance for your family – a lump sum paid to your family if you die, separate from the mortgage. This is about replacing your financial contribution to the household. What would your partner need to maintain their life, look after the children, take time to adjust? That number is different for every family.
3. Income protection – this is the one people skip. What happens if you don't die, but you can't work? Income protection replaces a portion of your earnings if illness or injury takes you out of your career. You can set a deferral period so it kicks in after your employer's sick pay runs out. If you're self-employed without sick pay, this is particularly important.
4. Critical illness cover – pays a lump sum if you're diagnosed with a specified critical illness. It gives you financial breathing room to focus on getting better, covering treatment costs, time off work, adaptations to your home, or simply removing the pressure of needing to earn while you recover.

Why is income protection the one people skip?

Income protection replaces a portion of your earnings if illness or injury stops you working, for as long as you can't work or until the policy ends. Of the four types of cover, it's the one I find most people don't have. And it's the one I feel most strongly about.

We can all imagine the worst happening. Nobody wants to think about it, but most people accept that life cover makes sense. What's harder to imagine is being unable to work for months or years because of an injury, a mental health crisis, or a condition that creeps up gradually.

I've seen it happen to people in their 30s. A friend had a stroke. Another lost a leg at 31. These aren't elderly people winding down their careers. These are people in their prime who assumed they'd always be able to earn.

If you don't have income protection and something happens, you can't fix it after the fact. You can't buy a policy once you've already been diagnosed.

The two reasons people don't do it

'It won't happen to me.'

Nobody thinks it will. The people I've seen it affect didn't think so either. These are professionals with demanding careers, families who depend on them, and every reason to assume things would carry on as normal, until they didn't.

The uncomfortable truth is that you're most likely to need protection during your peak earning years – the years when your mortgage is biggest, your children are most expensive, and the financial consequences of not being able to work are most severe.

'It feels like I'm being sold to.'

I understand this one completely. Insurance has a reputation problem. Too many people have sat through a hard sell from a mortgage broker and come away feeling pressured rather than informed.

My approach is different. I'm looking at your whole financial picture and identifying where the gaps are. Sometimes the answer is that you're well covered and don't need anything else. Sometimes it's that a small adjustment would make a significant difference. The conversation is about what fits your situation.

What protection do you need at each life stage?

What you need from protection changes as your life changes.

If you're in your 40s or 50s with a demanding career, a big mortgage, and children in private education, the financial consequences of not being able to work are enormous. You may have some cover through your employer – group life assurance, perhaps income protection through a workplace scheme – but have you checked what it actually covers? Many people assume their workplace scheme is more generous than it is.

This is where aligning workplace cover with personal policies becomes important. You don't want to be paying for cover you don't need, and you don't want to discover a gap at the worst possible moment. We can look at what your employer provides and build around it so you're properly protected without being over-insured.

If you're in your 60s and approaching retirement, the picture shifts. Mortgage protection becomes less relevant if the mortgage is paid off. Critical illness cover may become more important, and understanding how your existing policies interact with your retirement plans is worth reviewing.

And if you're self-employed, income protection moves to the top of the list. You have no employer sick pay to fall back on. If you can't work, nothing comes in. That vulnerability deserves proper attention.

The timing problem

Everything about protection planning comes back to timing. The earlier you put it in place, the more options you have, the lower the premiums, and the wider the cover available to you.

As you get older, premiums rise. If you develop a health condition, certain types of cover may become more expensive or unavailable. The window for getting comprehensive protection at a reasonable cost narrows as you age. It is also worth remembering that most protection plans have no cash-in value and will stop if payments to them cease.

Nobody wants to spend time thinking about insurance. But having appropriate protection in place may provide valuable financial support if you are unable to work, become critically ill or die.

Ready to check your cover?

If you'd like to review what protection you have and where the gaps are, I'd welcome a conversation. Sometimes the answer is that you're already well covered. I work with families across Weston-super-Mare, Bristol and North Somerset.

Get in touch to arrange a protection review.