Income protection insurance can ensure essential bills will be paid if you are unable to work due to ill health. But with the cost of living rising significantly over the last 18 months, it is worth checking any policy you have in place will still cover mortgage or rent, food and energy costs.
Income protection covers a fixed proportion of your salary and typically only pays out after you have been signed off sick from work for a number of weeks. The longer this deferral period the lower the starting premium.
If you’ve insured 50% of your salary, for example, it is worth checking this is sufficient to cover essential bills given the rise in energy costs and interest rates.
If not, you might want to increase the benefit on the policy, although this will result in higher monthly premiums. Alternatively look to build more substantial rainy day savings, which could be used to cover any shortfalls in an emergency.
