What are your most valuable assets? Is it, perhaps your house or maybe your car? Can you imagine for a second that you wouldn’t insure them?
But the truth is that neither of these things are the most valuable asset you own. In reality it’s your ability to earn an income. It’s the monthly salary that lets you pay the mortgage, buy your car, square up the grocery bills and jet off on holiday with your family.
But somehow the thought of insuring that income has never quite managed to get to the top of the priority list and people will pick up a policy for their pet before they buy one that safeguards the money they live off.
The impact of illness
Income is the foundation of everything we do in life and if you couldn’t work through unexpected accident, ill-health or disability it’s likely you’d be unable to support your family and maintain your lifestyle.
According to The Centre for Economic and Social Inclusion there are 17 million working households in the UK and of these it says 10.8 million could see their income drop by over a third if the main earner was forced to stop working – and this includes any assistance they’d get from the State. For 6.6 million families, the findings show their income could plummet by more than half.
The Association of British Insurers (ABI) is also working hard to shine a light on the need for people to safeguard their working life incomes. To this end it’s published a white paper that outlines the importance of income protection in today’s changing welfare environment.
Understanding income protection
The general wisdom is that income protection is too complicated, but it’s no more complicated than a pension and people fundamentally understand how they work and what they’re for.
The public know that they pay money into a pension and then use that cash to generate an income in later life. It’s a way of replacing their income when they stop working.
If people thought about income protection in the same way then they might come to see just how important it is. Income protection enables customers to replace the income they can’t earn if they’re struck down by accident, illness or disability.
Focusing on income replacement
When we understand the need to save throughout our careers to build up a pension that’ll provide an income in retirement, it’s strange not to afford the same priority to making monthly payments towards a policy that ensures we don’t lose the income that supports us during our working lives. Income protection should be a central theme to the financial strategies we employ for every stage of our lives and not just to retirement.
If you are concerned about protecting yourself and your family in the event of accident, illness or disability then why not call us to discuss how you can achieve peace of mind.