I don’t know about you, but when it comes to taking risks, I’m very much a Green Cross Code sort of man – stop, look and listen. Then I’ll probably look right, look left and look right again before I cross…
Having said that, I’m not averse to choosing a 100/1 shot for a big horse race or backing my team to win the FA Cup at 1000/1…
Our attitude to risk is something few of us really think about on a daily basis, but when it comes to insurance, it is something I talk to my clients about a lot.
I’ve talked about life cover and how important it is for your loved ones that they are covered if you die – but actually the risk of you being too poorly to work are far greater than you dying.
And yet the repercussions could be just as serious for you and your loved ones, with no money coming in to pay the mortgage, the bills, the food shopping costs and so on.
That’s why income protection makes such perfect sense.
According to insurers Royal London, every year a million people in the UK get an injury or illness that means they can’t work for a month or more.
Take a 40-year-old man, who works as an accountant and has outgoings of £2,500 a month.
Statistically, he is 12 times more likely to need a month off work sick then he is to die, four times more likely to need three months off, three times more likely to need six months off and three times more likely to need a year off.
Say his employer pays sick pay for a while, when that runs out he’ll be relying on government statutory sick pay of around £89.35 a week. Remember his monthly outgoings are £2,500. If his income drops to £387.18 a month, he’ll have an 85% shortfall – that’s more than just a bit of belt-tightening!
Income protection works by paying you an income if you are forced off work by injury or sickness. Levels of cover and premiums depend on your age and health and you can lower them by delaying when the cover kicks in – so you might say that you can go without help for three months say, or even six.
Insurance is complex and it’s worth getting some advice before you take out a policy. For a free, no obligation discussion on any insurance or mortgage issue, please give me a call on 07767 692653.