We buy insurance as a matter of course to protect us against all kinds of things happening. You may, for example, have policies in place already to protect your home and its contents, your life and your car. But, have you thought about protecting your income as well? For many, long term income protection and short term products may be a useful way of staying on a financial even keel if something goes wrong in life.

Let’s say, for example, that you find yourself unable to work. You may find that a long term income insurance solution may help protect you if you:

• have an accident;
• fall ill.

A short term product, on the other hand, may help you if you:

• cannot work through sickness or accident;
• are made redundant.

These kinds of problems may cause major financial headaches. Even if you have some form of employer led income protection this may not last for long and, if you don’t, then you may find the fact that you aren’t able to earn money may cause a lot of problems.

Long term income protection insurance is designed to help people who are unable to earn because of accident or illness. Short term protection adds job loss to the mix. Like any other insurance products they are set up to give protection in case the worst comes to the worst by helping you replace enough of your income to keep managing financially until you are working again or your income is no longer an issue.

There are two main types of insurance you may be offered in this sector. These are:

• long term income protection that helps you cope if you are unable to work because of illness or accident. These kinds of policies may be set up to pay a percentage of your income for the long haul. So, for example, you may be able to claim a replacement income until you are able to work again, until you reach retirement age or until your policy comes to a close;
• short term income protection that is designed to offer a similar solution but for a shorter time. This kind of policy, once again, covers illness and accident but also adds unemployment to the mix. The point to this product is to give cover for the short period that you are likely to need financial help before you get better and are able to work again or find another job.

In some cases you may also be able to take out both kinds of policy at the same time to give complete protection for both the short and the long term. Deciding which option to choose may be tricky and many prefer to go with a comprehensive solution.

Things may happen in life that we just cannot predict. You may not be able to safely say that you will always be in the best of health or that you won’t have an accident that prevents you from working at some point. Knowing how secure your job may be in the future may also be hard. The problems that come with sickness, illness or job loss may, however, put many people into severe financial difficulties. If you have no income coming in then any benefits that you may qualify to get from the state may not be enough to pay your mortgage and your living costs in the same way that a long term income protection or short term solution may do.

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