2023 saw record sales of Income Protection policies

Is this a sign of the times? 

In early March, the Association of British Insurers reported on the sales of income protection and critical illness policies and they both hit record levels in 2023. Critical illness policies have quadrupled in the last 10 years and last year sales of individual income protection policies hit almost a quarter of a million, a 16% rise on 2022. 

 

Being able to withstand a financial shock is part of good financial planning. The ABI review on policies sold last year showed that 97% of all income protection policies were sold along with financial advice. Financial resilience in a turbulent job market becomes ever more important and getting the right solution and provider is essential to secure your income stream in more challenging times. 

Income protection usually covers between 50-70% of your normal income, so you are not replacing your income but having a provision in place which will meet your essentials at a time of crisis. Unlike a critical illness policy, which pays out a lump sum, income protection is paid on an ongoing basis for the length of your insurance cover. 

 

There are variable types of income protection policies to suit individual circumstances, which include; short-term cover, these pay out for the term offered in the policy and finishes paying at the end of the term, whether or not you can return to work; long-term, these pay until you retire or return to work; occupation-specific, so you are unable to return to the type of work you were doing under the cover; guaranteed payouts that are given for the term of the policy and finally; renewable/age-banded, these fluctuate during the term. 

 

I would always recommend discussing what options might work well, as the types of cover come at differing price points and quite often need explanation. Getting protection in place, whether it be life, income protection or critical illness often provides peace of mind to a family and partners, especially where there is a young family to look after. If you are feeling like you want to talk these options over, please do give me a call.