Have you ever thought about whether you may need income protection? It doesn’t matter whether you live alone, are married or are raising a family, it may well be that you need to consider protecting your salary just as you might insure anything else that you own.

Before deciding whether income protection may be a good option for you, you may want to think about any alternatives that you may have. You may have other ways that might be able to help you financially if your salary stopped because of accident, illness or unemployment.

So, for example, you may have some employer benefits in place because of your work contract. You may qualify for help from the state or you may have some savings. It may, however, be worth thinking about whether these might be enough to meet your financial needs. For example:

• employer benefits may not last for that long and if you are unable to work because you find it hard to get another job or are too sick to get one, then it may be worth checking how long they would last for and how much you might be paid;
• state benefits may not give you enough money to live on and you may need to check if you might qualify for help with your mortgage and whether this might help you manage your commitments enough;
• savings may last for a while but you may want to check how long you might be able to live on them without your income.

Some consumers may feel quite secure once they’ve thought about this but, for many, what they have in place may not be enough to cover their mortgage, debts and everyday financial outgoings. Of course, many others may not have any back-ups to call on at all. It may, in those cases, be worth thinking about income protection and how it may be able to help.

The basic principle with this kind of cover is that you are making moves to replace a significant proportion of your salary if you no longer have it because of:

• accident;
• illness;
• job loss.

There are three primary options that you may want to consider. These are:

• long term protection for instances of accident or illness;
• short term protection for instances of accident, illness or unemployment (sometimes known as payment protection insurance or PPI, or accident sickness and unemployment insurance – ASU);
• Joint cover that includes both short term and long term policies.

These kinds of insurance policies are designed to help you cope with the loss of a salary by paying a percentage of it to you to help cushion the blow. A long term policy may, for example, be set up to help you cope with a major illness or accident and you may be given benefits until you are back on your feet again or you retire (or until the policy ends). A short term policy does much the same thing but for a shorter period of time and also includes issues with job loss.

Being able to meet your financial commitments in these difficult times may be extremely useful and putting an income protection policy in place may just give you and your family one less thing to worry about.

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