Protection Insurance: Understanding the Reasons you Need it

With soaring inflation and sky-high energy bills we’re all looking for ways to cut back but it’s important not to see protection insurance as just another Direct Debit to cancel.

That’s because unlike wasting money on a gym membership you don’t use, protection insurance offers important benefits. In fact, the current cost of living crisis means it might be more important than ever to have protection insurance.

Here’s why…

If you’re looking at your spending and wondering if you really need to pay life insurance premiums on top of everything else then it’s important to remember why you took the policy out in the first place. That’s because life insurance is designed to pay out to your family if you pass away – think of it as a financial safety net if the worst happens.

And with bills rising and no sign of the cost of living crisis easing any time soon it might be even harder for your family to manage financially if they rely on your income and you’re not there anymore. So before cancelling it’s a good idea to consider whether now is really a good time to take that safety net away.

But it’s not just a death in the family that can cause financial hardship. That’ because if you’re diagnosed with a serious illness that requires long periods off work it can have a devastating impact on the family finances. And with rising prices you might find it more difficult to manage than in recent years.

With critical illness cover, in the event of a successful claim you’ll receive a tax-free lump sum on the diagnosis of certain illnesses. And you can spend this money on whatever you wish, whether that’s covering essential outgoings like your mortgage and grocery bills or treating yourself to a break away.

So when you’re going through your Direct Debits and deciding what you can afford to lose, consider the benefits of having critical illness cover before cancelling it to save money.

Likewise when it comes to cost-cutting measures, before you cancel your income protection benefit to save money it’s a good idea to think about the benefits of it first. Income protection benefit can give you a regular income if you can’t work due to illness or injury until the day you’re ready to work again, until your chosen retirement age or the end of the plan, which will take the pressure off.

And if you’re having trouble paying the bills right now consider how you’d manage if you couldn’t work because you’ve had an accident or you get sick. However if you think you don’t need income protection insurance because your employer offers sick pay, check your contract to see how long this will cover you for because what if you’re off for six months or longer?

This might seem like a lot to think about so if you have any questions about protection insurance we have a team of experts ready to help you.