As you may know, I am really passionate about finances and providing a safety net for when things go wrong. In my opinion, the most important thing to protect is your income. Without it, all your plans for yourself, your loved ones and your future go out the window.

One way to protect ourselves is to have a savings buffer in place. This can be used for emergencies or funding for the time between jobs. But what happens if we are off work for much longer than expected due to an accident or injury?

This is where income protection comes in, which pays a monthly benefit to make up for lost income due to time off work because of accident or illness. Income protection policies can either be agreed value or indemnity policies.

Agreed value policies are just that, policies where you and the insurer agree on the value upfront, of what they will pay you if you are unable to work. Indemnity policies, on the other hand, give a guide as to the maximum the insurance company will pay but the final amount paid depends on the average of income for a period of time leading up to the claim.

From April 2020, any new income protection policies will only be indemnity benefits. What happens if you took time off work to travel, or raise kids or start a business – you will be paid much less!

If you or anyone you know needs to protect their income, please get in touch now before it is too late.