Protection Reflection: How to know what protection insurance you need.

Protection insurance is exactly what it sounds like: it’s a type of insurance that protects you by paying out if you find yourself unable to work. Having this safety net can be really helpful if illness or injury stops you from working, but how do you know what kind of protection insurance you need? Here are three common types of protection insurance to help you work out which one suits your circumstances. 

  • Income Protection Insurance 

Income protection insurance can help you if you’re off sick for an extended period of time. How it usually works is you’ll be paid a percentage of your salary for each month you’re off work, which should make it easier to cope financially while you recover. 

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If you run a business, you can get group income protection for your employees. This is good for both you and them, as they’ll be financially supported and are less likely to try to return to work before they’re ready – something that could result in them being forced to take more time off. With group income protection, they’ll be supported to return to work at a safe pace. 

Income protection can only be claimed after you’ve been off for a certain amount of time, normally a minimum of four weeks. While there are different plans to choose from, you need to be aware that factors such as your health and lifestyle and the type of job you do will affect how much you pay. Jobs that are deemed to put you at high risk of injury – if you work on a construction site, for example – will lead to you paying more for income protection than someone who works in an office. With that said, income protection is crucial for those in a high-risk job – you don’t want to be left without income if something happens. 

  • Life Insurance 

It’s not something we like to think about, but how would your family cope financially if you died unexpectedly? Life insurance is paid to them upon your death, either as a lump sum or as regular payments over months or years. 

Whole life insurance pays out regardless of when you die, while term life insurance pays out if you die during the policy’s pre-agreed term. 

It’s a good idea to have life insurance if you have children or other family members who rely on your income. As with income protection, you will need to disclose details about your health and lifestyle when you apply. 

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  • Critical Illness Cover 

Critical illness cover can help you if you’re diagnosed with a serious health condition and are unable to work as a result. This includes things like heart attacks, certain cancers and strokes. You can choose how much cover you want, although, again, the amount you pay varies based on your job and lifestyle. 

As with life insurance, critical illness cover is a good idea to have if you have family who depend on your income. It’s also worth noting that you can take out more than one type of protection insurance, so if you want cover for your income, your life and for critical illnesses, this is possible. 

With these pointers in mind, you will be able to make the most informed decisions about which protection insurances are essential or beneficial to you personally.