Imagine being unable to work because of an illness or accident—how would you manage your monthly bills, like rent or your mortgage? For many of us, losing that steady income would create real financial pressure. That’s exactly why income protection exists. It’s a long-term insurance policy that steps in to provide you with a regular income until you’re well enough to return to work—or even until retirement, if needed. Find out how it works, when you need it, and what you need to think about when buying it.
We publish two or three new videos every week to help you make informed decisions about your financial future. Whether you're navigating complex pensions or just want peace of mind when it comes to protecting your income, our goal is to educate you before you ever sit down with an Independent Financial Adviser.
What Is Income Protection Insurance?
Income protection insurance pays you a regular income if you can't work because of illness, disability, or accident. Income protection insurance could help to provide you with a regular monthly income. If you have family or loved ones that rely on your income to get by day to day, income cover can offer you peace of mind that you’re prepared for anything that life throws your way.
Typically, it’s based on around 50% to 70% of your salary at work, depending on which type of plan you take. Obviously, the higher the percentage, the more premiums you’ll pay. Again, the purpose is to trigger coverage in the event that you can’t work and can’t provide for or pay your bills.
A simple example: let’s say you have a family and kids. If you’re doing well financially and feel confident—ask yourself, would your wife, partner, or husband and kids be able to pay the mortgage if you were no longer here or unable to work?
You might have some form of life insurance through your job that pays out if you pass away, but that likely won’t cover the remainder of your mortgage term or all the expenses your family would still face.
Who Should Consider Income Protection?
Income protection is particularly important for people, young families, or anyone in a good situation but spending very close to their annual income. If you were to take away that annual income, how would the rest of your family survive? Or even you, if you're living on your own?
“Imagine you have a family with children. If you're financially comfortable and confident, would your spouse or partner be able to cover the mortgage and expenses if you were no longer able to work?”
Many people assume they are covered through the life insurance provided by their employer, but this often only applies in the event of death and may not cover ongoing financial obligations if you become unable to work.
A sudden loss of income due to illness or injury can lead to severe financial strain, not just for the person affected but for their entire family. Beyond financial concerns, the stress of losing a job can have serious emotional consequences. In times of crisis, income protection can serve as a vital buffer, preventing further emotional and financial turmoil.
How Much Does Income Protection Cost?
One of the biggest concerns about income protection is the cost. However, it may cost less than you think to benefit from this type of cover, especially for younger individuals, who can typically access premiums for as little as £10 per month.
The price does depend on a few things: your age, your health, what you do for work, even your hobbies and lifestyle. All of that plays a part. Plus, the type of cover you go for, how long you’d wait before it kicks in (that’s your deferred period), and whether your premiums stay the same or change over time.
Here at Cameron James, you can contact us for a free consultation to review your situation. We help you make an educated and informed decision whether it's a premium worth paying for you.
Does income protection cover more than you might expect?
When most people think about income protection, they picture coverage for physical injuries or serious illnesses, but it goes much further than that. If you’re assuming income protection only applies to accidents or hospital stays, it’s worth having a second look. You might be surprised at how comprehensive and supportive the right policy can be.
1: Life Impacts of Losing Income
Losing your income isn’t just about money. It brings stress, pressure on relationships, and emotional strain. Many couples face relationship breakdowns during periods of illness, unemployment, or financial pressure—especially with children in the mix.
From our experience, this kind of protection is crucial for anyone who couldn’t cover their living costs without their salary. The mental relief of knowing you’ve got a plan in place can be just as important as the money itself.
2: Changing Attitudes Toward Mental Health
The amount of people taking time off for stress-related issues is rising. We have kind of gone through that era of “button it up and get on with it,” which is how I started out in the industry. People work very hard—but the long-term effects are starting to show, especially in high-intensity roles like consultancy, banking, and law.
3: Protection During Burnout
There's a lot of burnout happening in companies. Big companies are getting better at looking after people during these periods, sometimes continuing to pay you while you're off. But having income protection in place gives you the security of knowing your family and loved ones will be fine while you go through that tough period in your life.
“The number of people taking time off due to stress-related issues at work has increased. Burnout is becoming more prevalent in companies. Having income protection in place provides the security of knowing that your family, loved ones, and beneficiaries will be financially stable while you navigate this challenging period in your life.”
Final Thoughts: Is Income Protection Worth It?
Income protection insurance isn't just a financial product, it's peace of mind and reassurance if life throws you a curveball. Whether it’s illness, injury, or unexpected stress, you won’t be left worrying about how to pay the bills or support your loved ones.
While it might be tempting to see premiums as “just another cost,” it’s worth considering the true cost of not having coverage. For many, losing an income can quickly lead to mounting debt, strained relationships, and long-term financial instability. Income protection offers a buffer that can help you navigate those difficult periods with greater confidence and less panic.
We understand that no two financial situations are the same. That’s why at Cameron James, we offer free consultations tailored to your individual needs. Whether you're just starting your career, have a growing family, or are nearing retirement, we can help you navigate your options holistically. Taking a few minutes today to explore your options could save you months or even years of hardship down the line.
Book your free consultation today to explore your options, and as always take care of your UK Pension Assets!