A recent study by one of the UK’s leading personal insurance providers has revealed that 3.2 million couples here in Britain would find themselves financially vulnerable were their partner’s income stream to be compromised as a result of an unexpected job loss.
LV goes as far as to suggest that millions of couples rely heavily on each other’s joint income to cover the household expenditure on an on-going basis, and in the event of one of these salaries being removed from the equation then broad-sweeping changes would be unavoidable.
Although this worrying revelation doesn’t appear to have hit home as much as it should have done, as clearly demonstrated by the lack of notable contingency plans being put in place by (otherwise) forward-thinking partners responsible for joint budgets.
Indeed, despite this grave warning delivered by the release of such stats, an eye-opening 64% of the households polled by the income protection insurance provider benefited from such a an essential product, whilst 25% hadn’t even considered the merits of signing up to such plans.[/nav-text]
Of course, and for those not in the loop, an income protection insurance policy remains one of the best ‘get out of jail free’ cards you could opt for should this situation appear on a horizon anytime soon. Getting both parties on board with this type of contingency plan would “enable them to focus on recovering without the additional stress of paying the bills,” so says the MD of LV, Myles Rix.
His views are shared by Life Office Relationship Director at life insurance experts, Lifesearch, Emma Thompson who recently said (when spoken to by www.ftadviser.com); “Unfortunately people often don’t think about what might happen, or know what options are available to help them. These worrying statistics really highlight the need to have a financial safety net, such as having Income Protection.” Thompson went on to add; “Cover is often much cheaper than people think, yet it can make a world of difference when ill health strikes.”[one-half]
Neither party are wrong, as income protection insurance policies are widely available today, with a range of cost-effective examples within all of our grasps.
When you think about it, insuring our earnings should really come as second nature to us and not be something we need to be reminded to do.
We all routinely insure our homes, cars, travel plans, health and pets, so why extend that to the one thing which pays for all the above. Yup, our income stream.[/one-half] [one-half-last] [box color=”grey”]
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Without which we’d quickly be left up the proverbial financial creek minus the all-important paddle. And essentially with a Grand Canyon-shaped waterfall drawing us ever closer to the (monetary) edge.
OK, you may ask why it’s imperative that we secure our earnings when there’s state benefits to fall back on when things start to go a bit awry, as well as employer’s own statutory sick pay. Which may be all fine and dandy if you’re talking about an extended bout of man flu or a muscle being tweaked during a team-building weekend in muddiest Wales.
But what about if you’re diagnosed with a serious, lifestyle and career-threatening illness/medical condition of sustain an injury which could take months to heal before you’re back up on your feet? What then? (Plus, given the level of government support available and with fewer employers offering long term sick benefits above and beyond Statutory Sick Pay, a personal income protection policy is more important than ever). Fact.
Income protection insurance is designed with the long haul in mind (although short-term plans tailored around specific time durations prove equally popular these days), and has been created to protect up to 70% of a policyholder’s gross salary should they be inconvenienced by the sudden imposition of ill health or physical/psychological injury.
This would naturally make a significant difference in terms of monetary contributions within a partnership/household if one of the parties were to become incapacitated for an undefined period. For these couples it would provide a safety net in case one member falls ill or is unable to work, but the difference between many who consider themselves ‘dependent’ is to what upkeep this constitutes.
Whilst as far as many are concerned, the fiscal provisions set aside by an income protection insurance pay-out would mean as to literally keep a roof over their heads, others might readily admit they would have to make lifestyle changes in order to survive on the one salary, such as cancelling holiday plans and gym memberships.
Either way, without the protection that income protection plans afford the individual/couple, remaining financially solvent when faced with a major health problem would be a challenge beyond the reach of many.[one-half] [box color=”grey”]
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