It was while I was chatting on the phone to a Business Development Manager from a Protection provider that the concept for this article came to mind.
During most mortgage meetings I am asked the question "What Life Assurance should we have in place?" Of course, the sensible answer is 'Enough to ensure that your mortgage will be repaid in the event of either of you dying!'...BUT is that really the best solution...or even the correct solution?
Let’s just think about this for a minute. What if you don’t die and don’t suffer from a Critical Illness? What if you are involved in a bad accident and cannot work for several months?
You have insured your car, you insure your home contents, you insure your life to protect your family if you die and you even insure your pets…however you do not insure the one thing that makes it all possible…your income!
Just how daft is that?
Without your income nothing else is possible, is it?
Well, the response that I usually receive is “We will be OK because we would get Statutory Sick Pay until we can return to work”.
Well Statutory Sick Pay is there in the background and it does provide an element of cover, however Legal and General’s ‘Workplace Wellbeing’ research found that:
Employees grossly overestimated the value of SSP (which is currently £89.35 as of April 2017) by an average of 62%.
Three quarters (76%) of employees thought SSP was £100 or more per week, and 15% even thought it was over £200 and;
Once these employees were aware of the reality of SSP, three-quarters of them said they would only last at most one month before having to cut back on monthly outgoings.
So, just how long does SSP last? A popular misconception is ‘until you return to work’… actually it is only available for 28 weeks and then you are well and truly on your own!
Not a very comforting thought, is it?
However, Income Protection Policies are available and can provide cover to ensure your mortgage is protected or your mortgage and your lifestyle are protected.
It is possible to arrange policies with deferred periods so if you are paid for say two months by your employer if you are off long-term sick it would be possible to start cover after this initial period.
If you would like further details of how you can protect your income, please feel free to give me a call.
As with all insurance policies, conditions and exclusions will apply