Is income protection worth it?

Considering buying income protection insurance but unsure whether or not it is worth it?

It can be tricky to decide whether it is worth parting with the monthly cost to cover you for loss of income due to illness or injury - especially if you are fit and healthy. This article will run through why income protection insurance is (or isn’t) worth it. 

What is income protection insurance?

We have a whole article on what income insurance is, but in case you missed it, here’s a brief run through. Income protection insurance is a policy that covers you if you are unable to work through illness or injury, and ensures that you still receive a regular income. 

What can you claim for?

Usually, people claim for serious illnesses like cancer, strokes and heart attacks; mental illnesses such as depression and anxiety; and injuries such as long-term back pain or serious injury caused by an accident. If an illness or injury leaves you incapable of working (according to your insurer’s definition of incapability) you can claim on your policy for any medical reason. 

What’s the risk if I don’t get income protection insurance?

The main risk of not having income protection insurance is not being able to survive (pay your bills, eat, heat your home, clothe yourself etc) if you were to be ill or injured to the point where you cannot work.

This risk will be different for each person, depending on circumstances such as financial commitments, dependants, and length of period that you cannot work for. For most people, a loss of income would lead to financial hardship - whether that be instantly or over time, as we use our regular wage to pay for our necessities. 

As of 2022, 42% of people in the UK had one or more dependent children, so it is easy to see how a missing income could have a significant negative impact on the entire family, not just the individual who is unable to work. 

So, is income protection insurance worth it?

The easiest way of figuring out whether income protection insurance is worth it for you, is to ask yourself this question:

“If you were too unwell to work, would you be able to keep up with the cost of your life?”

If the answer to this question is no, it is probably worth looking into investing in some income protection insurance.

Income protection for higher risk industries

There are some industries that pose a higher risk of getting injured than others. Individuals with jobs in areas such as agriculture, construction and professional sport may be more likely to receive work-related injuries, and therefore it may be even more worth them purchasing income protection insurance. 

At Wiltshire Friendly, we have been offering bespoke coverage for professional, semi-professional and amateur rugby players since 2011. Playing rugby increases the risk of injury and heightens the risk of you not being able to carry out your job.

Will my income protection insurer pay out?

As long as your doctor signs you off as being unfit for work and you meet the definition set by your particular insurer, then yes - your policy will pay out after you’ve reached the end of your pre-agreed waiting period. How long the policy pays out for while you’re not working depends on what type of cover you have. There are two different types: short-term and long-term.

Short-term cover

Short-term cover will pay out for the fixed amount of time agreed in your policy, or until you return for you - whichever is sooner. The most common time frames are 1, 2 or 5 years. 

Long-term cover

Long-term cover will continue to pay out until you’re well enough to return to work, or until your policy ends - again, whichever happens first. 

How Wiltshire Friendly can help

If you're wondering whether income protection is a wise choice, Wiltshire Friendly can give you the information and advice needed to make that choice. We offer accessible income replacement coverage for a diverse clientele, including individuals, employers, and even rugby players from all levels. Our mission is to help those whose income has been compromised by illness or injury.

Whether you need to file a claim, explore options for increased coverage, or tailor a plan to your unique needs, our dedicated team is here to support you. Reach out to us today and discover the value of income protection.