Saturday, 22 September 2018 14:21

Income Protection, time to think about it?

How safe is your job? Are you confident that the job you’re currently in is a job for life? If the answer to the latter question is a ‘no’, then you should ensure that you are completely covered in the event of redundancy or any other event which means you no longer have a wage coming in.

The reason we’re giving this warning is because we have come across figures this week which highlight that many employed people don’t have any insurance or protection in place in the event of them losing their job which would result in them having nothing.

The figures which were generated by a well-known insurer show that only nine per cent of people would have income protection if they were to lose their job. Startlingly, it also showed that one in seven people would lose their home altogether and would have to sell up if their employment came to an end.

You’d think that with all the uncertainty in the world that people would be even more inclined to ensure that they had a financial backup in place should the worst happen. Brexit, for instance, has left a lot of people wondering what is in store for them in terms of job security, but, if anything, it appears people are still resting on their laurels, which ultimately could land a lot of families in hot water.

What if things did go wrong?

Almost a quarter of people also have nothing in the bank account to fall back on should their employment come to an end either, meaning not only would they lose their home, but they would also have no funds to start afresh.

We’ve lectured our readers for years about the importance of monetary planning and always preparing for the worst, but it appears that people are still not taking the subject seriously.

If you are the sole bread winner that the family relies upon, why would you not want to protect that income should something out of your control happen? Imagine, for instance, that you did a manual job but you pulled your back or got physically injured and that meant you couldn’t do that job anymore. You would eventually have to leave that role and that income would disappear. For some people this would mean that the family home, the car and everything else that had been worked for would have to be sold – families would be left with nothing.

It isn’t just the worker that would be directly affected in this instance, either. If you have children, you would have to think of the kind of impact that this would have on them. They would lose the home that they grew up in and would have to witness the stresses and strains taking the toll on their parents. It could potentially have a negative impact on them at a critical stage of their growing up.

People need to stop being so lacklustre and take finances far more seriously. Nobody knows what is around the corner meaning people should never take for granted what they have. It’s super easy to get income protection and is definitely worth it in the long run – so why are more people not doing this?

It’s understandable in the times that we live in that people feel like they don’t want to lose precious pennies by putting money into insurance protection schemes, but it really is worth it if your income is what is keeping the family’s head above water.  What’s more important than putting a small amount of money away to keep your family life protected should you lose your job? In that respect, it is priceless.

There are some people who don’t like giving money to insurance companies as they feel they can’t trust them, and that is absolutely fine, but this shouldn’t stop people from opening another account and putting money away in the same way. Putting money away in another account effectively does the same as paying into an insurance policy, but you must have the desire and the will to religiously put money away every month, and, more importantly, never touch it.

We don’t know what more it will take for people to sit up and listen and appreciate the severity of their finances.

Take a look at the home you’re sitting in now and imagine losing it. Only then may it actually hit home the importance of protecting income and the family life that you have created for yourselves.

2 comments

  • Comment Link Wednesday, 26 September 2018 14:42 posted by C

    Unfortunately if you have a look at the rates they charge now they have clearly priced in the fact that redundancy is coming for a lot of people. You also need to look at the terms and conditions as some will invalidate your claim very easily. Be careful, I wouldn't recommend it.

  • Comment Link Thursday, 04 October 2018 12:14 posted by beth

    I'm being made redundant but don't have any income protection, i'm gutted and worried at the same time. I'd definitely recommend having a safety net in place should the worse happen - i wish i would have done, i wouldn't be so worried about it now. My boss on the other hand is getting a brand new car...

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