Published: 04/06/2025 By Oliver O'Brien
Protecting yourself in the event you’re unable to work due to sickness or accident is often overlooked in favour of death related benefits, meaning support at an incredibly vulnerable time may not be available. There are three major categories of cover and all can be invaluable in protecting your family and financials; Life Assurance, Critical Illness Cover and Income Protection. As a quick refresher, we’ve summarised what these are below:Income Protection
Typically pays a proportion of your earnings to you until you are able to return to work
Critical Illness
Typically pays a lump sum, or income, if you are diagnosed with a serious illness
Life Assurance
Pays out a lump sum in the event of your death
Let's look at some common questions and use some of the latest data from LV=’s 2024 claim report to answer them:
How would I pay the bills if I can’t work due to sickness/injury?
People often think to fall back on savings but consider the average claim lasted for 5 years and 8 months. Would you have sufficient savings to pay the bills for over 5 years? In the most extreme example, a claim was paid for over 36 years.
Statutory sick pay only lasts up to 28 weeks and provides only £118.75 per week, providing only £3,325 in total.
Why would I need protection now? I’m young and in good health!
The average age of an Income Protection claim was 45 and the youngest 17. Compared to the average age for a death benefit policy being 66, this is a significant difference. An illness or injury removing a younger individual’s ability to earn could be potentially more catastrophic than somebody closer to retirement as well.
The cost of protection can also decrease the younger and healthier you are. Setting it up early can save you in the long-term.
What about immediate needs or large costs?
Where Income Protection can provide income, Critical Illness Cover (CiC) can provide a lump sum at potentially the most difficult stage of somebody’s life. In 2024, more than 3 in 5 claims for this type of policy were due to cancer. The average age was 51 and the youngest claim 25.
CiC also typically covers claims for children, given you further peace of mind that you have adequate financial support at the most difficult times.
In the event of death, life assurance can provide a lump sum to ensure your family is protected, for example repaying the mortgage or setting up the kids for the future. While the average age for such a claim is higher at 66, the youngest claim in 2024 was 24.
I’m cynical about insurance, they’d do anything to not pay out right?
In 2024, LV= paid out 95% of personal protection claims, paying almost £137,000,000 to over 8,000 individuals. This gives excellent confidence that if you set up the right cover, properly, you can have the reassurance that you will be covered. Most reputable insurance providers are proud of their high claim pay-rate and will readily provide it on demand.
Many insurance providers also provide a suite of services to support their protection policies such as GP/Doctor apps, Legal Advice and even rehabilitation support. By providing these ancillary services, the insurers can help reduce claims (by helping prevent health issues before a claim) or reduce the time on Income Protection by helping you return to work.
How does tba Wealth Management fit into this?
Ensuring you can support your family in the absence of a steady income can be one of the most important decisions you make. Choosing the right cover is critical. Over 70% of the unpaid claims were due to misrepresentation (and fraud) so making sure you are applying for the right policy, with the right terms and providing the correct and accurate information can be a big job. Do you cover just death, or a blend of income and lump sums? What is right for you and your family?
An expert financial adviser from TBA can help you identify your protection needs, the best provider on the market and guide you through the application process to ensure you’re getting the best possible protection.
Speak to one our advisers to learn more, we can be contact on 0208 661 7878 or email advice@turpinba.co.uk in the meantime check out our Life Assurances and other Protection Policies page