MORTGAGE ADVICE: Income Protection - How Much Do I Need?

Covid has taught us many things, not least the importance of staying healthy for ourselves and our family.

Through the hundreds of client meetings we have, we see first-hand clients in financial difficulty due to not being able to work due to illness or the loss of a family member, especially when they are the main income earner.

Given the current climate, I think it is important to increase the awareness of the financial protection available to you and your family which is why this week’s newsletter is all about protection.

Income Protection – How Much Do I Need?

If you want to take out income protection insurance, you might be wondering how much cover you need. Understanding the amount you realistically require could result in cheaper premiums.

When it comes to income protection, the first thing to understand is that it is designed to cover your essential expenses if you are unable to work due to illness or injury – not your full monthly income.

What makes the list?

Think about what would happen if you were unable to go to work. Which expenses would continue regardless, and which would cease or lessen?

Expenses like your rent or mortgage, household bills, and any outstanding loans are essential because they would still need to be paid even if you had no money coming in. Expenses like commuting to work, going out for drinks, or buying your daily latte, would stop for the time being.

How long do you need?

As well as how much you need, it’s important to consider how long you’d need it for. Some protection cover is designed to pay out for a fixed period, while other policies pay out for much longer. Short-term cover is likely to be cheaper, so only cover yourself for what you think you’ll need.

Protection is crucial to wellbeing.

Financial concerns cause one in four of us to have sleepless nights. And it is no secret that the coronavirus pandemic has worsened many people’s insomnia and financial troubles. In these uncertain times, the benefits of protection policies become especially clear.

Peace of mind

The past couple of years has been immensely challenging for a variety of reasons. Amidst all the uncertainty, however, one thing has remained constant: our need for financial security and peace of mind.

Having the right protection in place can play an important role in supporting all-around wellbeing.

Even before the pandemic struck, financial worries consistently ranked as one of the main causes of stress in UK adults. Financial wellbeing paves the way for an enjoyable and meaningful life, providing certainty and security both now and in the future.

The knowledge that our loved ones will be provided for after we are gone helps many people sleep a little easier at night.

Wider financial plan

Protection should play an important role as part of your wider financial plan. We can help you secure the most suitable protection for your needs; don’t hesitate to get in touch to find a piece of calm amidst the storm.