The need for income protection

I went to the barbers recently to get a haircut. The barber was as mad a box of frogs and was chatting away to me about this or that. During the chit chat she asked me what I did, so I told her I help people with their money. People normally switch off when I say that but she was delighted. She told me that you can be buried for a few grand but what is important is if you are alive but too sick to work.

She explained that her father suffered 5 brain haemorrhages in one day but they didn’t kill him. He lived for another 23 years in a coma in hospital. She told me how hard it was for her mother to deal with all the emotions of her husband being in hospital for decades and on top of that, she had to raise the kids on her own. “Could you imagine if she had to worry about money on top of that?”. Thankfully her father had an income protection plan that continued to pay out all the time he was in a coma and the family were alright financially.

While this is an extreme case, it really drives home the need to protect your most valuable asset, your ability to work and earn an income. Even if you are out of work for 9-12 months, how will your finances be when you eventually get back to work? Can you afford to pay your mortgage and other bills? If you are self-employed, any State assistance is means tested, so you will have to deplete most of your savings before you get any financial help from the State.

Income protection insures your income if you are unable to work due to accident, illness or injury. It pays you a regular income right up until you return or work or in the worst case scenario, until you reach retirement age. Income protection isn’t cheap compared to life cover; that is because it can pay out on so many different situations and can pay out for decades. You do  do get tax relief on the premium which reduces the real cost to you.

If you have any questions, you can contact me directly at