Do You Really Need Income Protection Insurance?
You really need income protection if you're self-employed, have a mortgage, are the main earner, or have less than 6 months' savings. If illness stopping you working would cause financial hardship, you need it. State benefits are minimal (£90/week) and most employer sick pay is limited to weeks, not months.
Who Needs Income Protection?
Self-employed
No employer sick pay - income stops immediately when you can't work
Mortgage holder
Monthly payments don't stop if you're ill - protect your home
Main earner
Your household depends on your income for essentials
Limited savings
Less than 6 months' expenses saved means high vulnerability
Frequently Asked Questions
Who definitely needs income protection?
Self-employed people, sole breadwinners, mortgage holders, and anyone without substantial savings (less than 6 months' expenses). If losing your income would mean missing mortgage payments or struggling to pay bills, you need it.
Who might not need it?
People with substantial savings (12+ months), those with generous employer sick pay (6+ months full pay), retired people, or those whose partner could cover all household costs alone.
Can't I just rely on savings?
Savings help short-term, but long-term illness can last years. Average income protection claims last 5+ years. Most people's savings wouldn't cover that. Income protection costs far less than building a fund to self-insure.
Is employer sick pay enough?
Usually not. Most employers offer only statutory sick pay (£116.75/week) after a few weeks of full pay. Check your contract - if sick pay is limited, income protection fills the gap.
Related Questions
This page provides general information only and does not constitute personal financial advice. Income protection insurance products and their terms vary between providers. Always read the policy documentation carefully before purchasing. Your Home Finance is authorised and regulated by the Financial Conduct Authority.