Is It Worth Having Income Protection?
Income protection is worth having for most working people, especially if you're self-employed, have a mortgage, or couldn't survive 6+ months without your salary. It pays up to 70% of your income tax-free if illness or injury stops you working. The relatively low monthly cost provides significant financial security.
When Income Protection Is Worth It
Self-employed or freelance
No employer to provide sick pay when you can't work
Main household earner
Your family depends on your income for essentials
Mortgage or rent to pay
Housing costs don't stop when you're ill
Limited savings
Can't survive 6+ months without your salary
Frequently Asked Questions
When is income protection definitely worth it?
It's definitely worth it if: you're self-employed, you're the main earner, you have a mortgage, you have less than 6 months' savings, or your family depends on your income to pay bills.
When might income protection not be necessary?
It may be less essential if: you have substantial savings (12+ months expenses), your partner could cover all bills, you have a generous employer sick pay scheme, or you're approaching retirement.
What's the alternative to income protection?
Alternatives include building a large emergency fund (6-12 months expenses), relying on employer sick pay (often limited), state benefits (minimal), or a working partner. None offer the same security as income protection.
Should I prioritise income protection over life insurance?
Many advisers suggest prioritising income protection because you're more likely to need it. However, if you have dependents who need financial security if you die, both are important.
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.