Even before we take into account the current impact Covid-19 is having, imagine if you found out you were unable to work for a lengthy period because of illness or an accident. Would you be able to manage? Do you think that you might need to protect at least some of your earnings to enable you to pay your basic outgoings?

You might think that your employer might come to your aid, either based on your contract of employment, or as a paternalistic gesture of goodwill. Perhaps you believe that your family would come to your aid. You may even think that you have sufficient savings to tide you over. 

However, how realistic are any of these options? Particularly, over an extended period? Have you ever considered how you might meet the cost of your mortgage, your utility bills, or other outgoings and daily expenses?


There is a solution and it is in the form of income protection insurance (IPI).

This can cover most of the income you earned before you became unable to work. The insurance payments start after you have been off work because of illness or injury, after a specified period of time. You would continue to receive these payments until you go back to work, reach a certain age, or die. 

You can add to these payments, cover to make sure that any pension contributions you are making continue to be paid too. This is important if you don`t want your longer term retirement planning to be interrupted because of your inability to work.

The cost of your cover is worked out at the beginning. Therefore from outset, you know what you are covered for and at what cost.

You may be interested to learn that during someone's working life, they are much more likely to be off work because of illness or injury, than they are to die. However, people are far less likely to buy IPI than they are life insurance. Indeed, more people take out pet or mobile phone insurance than IPI.  

A word of caution. IPI doesn’t cover people who aren`t working because they have been made redundant. If you think you might need cover in this situation, then you will need to arrange a different type of insurance.

You may be wondering how much IPI costs. In general, that is a difficult question to answer. The cost of the cover is calculated based on an individual’s personal circumstances which includes age, what work you do and your general well-being. In essence, it comes down to the more likely you are to claim, the more expensive the cover.

So, what would your circumstances be like if you couldn`t work due to an illness or injury? Could you meet your living costs? If not, then you would be strongly advised to consider taking out IPI.

If you in any doubt about whether you might need such cover, speak to your Dentons Wealth IFA to get their professional advice.

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