Income protection pays the bills when you cannot!

Tuesday 10 January 2017 | 04:19 PM

Ok, so we know why people insure their car - it's the law, similarly if you have a mortgage it is compulsory to insure the property.


Every other insurance is in theory optional, with many people choosing cover for pets, mobile phone and their household appliances either by their own choice, thinking it was compulsory or worse not even knowing what they are paying for each month!


However, very few people insure the very thing without which a pet, mobile phone or many household appliances would become a luxury…I am talking about protecting your income, salary, wage, whatever you want to call it, this is what pays the bills for most of us.


  • What would happen if due to long term illness, injury or accident your income stopped? Take a look at your monthly net pay and then ask how long you might survive without it?


  • If you are really lucky your employer will pay you for a period, maybe even full pay for the first 6 months of illness but what happens after that?


  • Possibly you have savings, but how long would these last even in just maintaining your “essential” monthly outgoings?


  • “My family would help” is another common response, maybe, but how long could this be sustained before tensions arise?


Lastly, some people say that they could survive on a partners’ salary alone – either your partner loves his/her job and works for this reason alone, or you currently save all of their wages each month – are either of these scenarios realistic?


Income protection cover is a possible solution, which can be tailored to your individual circumstances:


            To begin after any employer’s sick pay ceases.


            To end in line with a mortgage being fully repaid or children finishing education.


            To increase in line with inflation.


To be underwritten by the insurer at the time of application so that you know exactly what is covered and any exclusions.


Provide an income in line with current net salary for the lifetime of the policy.


Ah, I hear you say “but these policies don't pay out when you need them”. This is a myth and recent statistics confirm that 97% of claims were paid out (Association of British Insurers), with those which weren't successful were usually due to existing illnesses not being declared when applying for the policy.


So taking things back to reality, pet insurance may well prove to be essential when your beloved cat, dog etc is ill, but who feeds him / her if you are too ill to afford to?


Paul Hardingham and Tony Ibson are Mortgage and Protection Advisers at Innovate Mortgages and Loans. Both have over 20 years of experience advising individuals and businesses across the North East of England. They can be contacted for bespoke advice at or or call 0191 223 3514.


Think carefully before securing other debts against your home.


Your home or property is at risk of repossession if you do not keep up repayments on a mortgage or other loan secured on it.


Innovate Mortgages and Loans is a trading style of Innovation Financial Management Ltd.