Income protection – is your income protected if you couldn’t work?
Could you pay the bills if you couldn’t work? How much would you be entitled to if you were too ill to work, or had an accident? We asked Ronan Gregory, of Ronan Gregory Financial Planning (part of the Abacus Group) about protecting our income if we can’t work, and why we should have it, and review it often.
Q: So Ronan, what is Income Protection?
A: Income protection is something that gives you, and your family, peace of mind. Imagine a situation where you were ill for an extended period of time, or were in an accident. How would you manage financially? Where would the money come from to pay the mortgage or other debts, pay household bills, and buy groceries?
Q. I will get sick pay from work. That should be enough shouldn’t it?
A. It depends on your employee benefits. Some companies will provide sick pay for a certain period of time (often linked to how long you have worked there), others will only pay statutory sick pay (SSP), which for a single person is currently under £95/week (as of 7th April 2019). If you think you would struggle on this income, or would struggle after your company sick pay runs out, there are options.
Q. I’m self-employed, so what do I need?
A. There a few options that work well for self-employed people, and what we would look at will depend on your circumstances. SSP doesn’t apply if you are self-employed, so it is very important to consider your options, and how you would manage if you were off work for longer than a few days.
Q: OK Ronan, I have life cover, why would I need Income Protection as well?
A: Having life cover is great, and protects your family if you were to die. Critical illness is great in this situation too. But what if your illness wasn’t covered under your critical illness plan? How would you manage if you were recovering from an accident for example, or were off long term due to stress? It isn’t a matter of having one or the other, they often go hand in hand.
Q: What types of cover are out there?
A: There are a range of types of policies on the market, and each has its own role to play. For example, some will cover you for a specific length of time (eg 1 year), others 5 years, or even until retirement. Many can be tailored to work with your benefits. Some policies will even cover you if you are made redundant by the company you work for.
Q: How do I know which one is best for me?
A: The best way to find out what will work for you is to speak to a financial adviser. We are able to chat with you about your circumstances, and help work out what type of life cover is right for you.
If you would like to discuss protecting your income, you can contact Ronan on 02922 677184 to arrange a time to chat about your options, and book an appointment time that works for you.
Ronan Gregory Financial Planning covers the South Wales area and is able to provide advice on life cover, investments, tax planning, LPA, wills, pensions, and much more. For further details, on these and other financial matters, contact Ronan directly here.