6 Minutes a Day to Protect Your Pay with Income Protection

We often put off important decisions, thinking we have plenty of time. But when it comes to protecting your income, tomorrow is too late. The sooner you have income protection in place, the sooner you can enjoy peace of mind knowing that your financial future is secure.

The Money-Making Machine Analogy

Imagine a machine called 'The Money Mill' that churns out £100 every day – your income.

But one day, it breaks down! No more £100 notes. This is what it feels like when you can't work.

Luckily, you invested in breakdown cover for just £1.37 a day. If your machine malfunctions, you'll still receive £60 every day until it's fixed. This is what income protection insurance does for your ability to earn.

Breaking Down the Cost

Let's put those 6 minutes into perspective. For a 30-year-old earning £35,000 a year, an income protection policy covering 60% of their income could cost as little as £38.26 a month. That's just over £1.20 a day – less than the price of your coffee!

Here's how we arrived at the "6 minutes" figure:

• Annual salary: £35,000

• Weekly earnings: £35,000 / 52 weeks = £673.08

• Hourly rate (based on a 36.6-hour working week): £673.08 / 36.6 hours = £18.39

• Daily cost in minutes: (£38.26 monthly premium / £18.39 hourly rate) x 60 minutes per hour / 21 working days per month = approximately 6 minutes

Even if you're older, income protection is still incredibly affordable. For a 40-year-old earning the average UK salary, it would take just 10 minutes a day to protect 60% of their income. The premiums are guaranteed, so if you take it out when you are 30, even if you've claimed, when you get to 40, the price will be exactly the same. The key is to act now and secure this valuable protection before the unexpected happens.

This is for Full Cover to age 68 with a 4 week deferred period illustrations available below

To cover 60% of The Money Mill's output for just 1.4% of its daily income seems like a no-brainer, right? Well, that's essentially what you're doing when you invest 6 minutes of your working day in income protection. So, the question is, why wouldn't you have this protection for yourself?

Why Don't More People Have Income Protection?

So, if protecting your income is such a no-brainer, why don't more people have income protection insurance? Let's explore some common reasons and debunk a few myths along the way.

"I'm healthy, I don't need it!"

It's easy to feel invincible when you're in good health, but illness or injury can strike anyone, unexpectedly. A sudden accident, a chronic illness, or even mental health challenges can disrupt your ability to work and earn an income. Income protection provides a safety net for those unforeseen circumstances.

"It's too expensive!" Is Income Protection Expensive?

This is a common misconception. Income protection is often more affordable than people think. As we've seen, it can cost as little as 6 minutes of your working day to protect a significant portion of your income. The exact cost will depend on factors like your age, health, occupation, and the level of cover you choose, but it's worth getting a quote to see how affordable it can be.

"I have sick pay from my employer."

While employer sick pay is helpful, it's usually limited in both duration and amount. Most employer schemes only pay out for a few weeks or months, and the amount may not be enough to cover all your essential expenses. Income protection provides longer-term coverage and can be tailored to your specific needs, ensuring you have adequate financial support during your recovery. One way to tailor your policy is by adjusting the deferred period, which is the time between when you become unable to work and when your payments start. By opting for a longer deferred period, such as aligning it with the duration of your employer's sick pay, you can potentially reduce the cost of your premiums while still ensuring you have a safety net in place for longer-term illnesses or injuries.

"I'll just rely on my savings."

Relying on savings is a risky strategy. A long-term illness or injury can quickly deplete your savings, leaving you financially vulnerable. Income protection provides a consistent income stream, allowing you to preserve your savings for other purposes, like retirement or your children's education.

"It won't pay out when I need it."

Will Income Protection Pay Out? Absolutely, and a lot more than you might think. 

Income protection providers have a strong track record of paying out valid claims. For example, both Aviva and LV= paid out on 92% or more of income protection claims in 2023. Aviva paid out over £50,000,000 in total for Income Protection claims in 2023. It's important to remember that these claims aren't just for short-term illnesses; the average length of an income protection claim is 5 years and 10 months. This highlights how income protection can provide crucial financial support during extended periods of illness or injury.

Choosing the right policy and ensuring it aligns with your needs and circumstances is crucial. That's where seeking professional advice from a qualified financial advisor is essential. They can help you navigate the options, understand the terms and conditions, and avoid any potential pitfalls that could lead to a claim being rejected. Don't wait until it's too late – get the right advice and ensure you have the protection you need.

Don't Wait: Protect Your Income Today

We all like to think we're indestructible and will never get ill, but we can all name a friend or family member who has suffered an unexpected illness or accident. So, we know it can happen to us. And the reality is, the number of people off work due to long-term sickness is on the rise. In April 2024, a record 2.83 million people in the UK were unable to work due to long-term sickness. (Source: Statista)

There are always a million things we'd rather be doing than sorting out insurance. It's boring, and we make excuses not to do it, saying we don't have the time. But when you can't work because you're unwell and you've got all the time in the world, it's too late.

We have to be realistic and responsible. Talking about insurance isn't fun, so do it with an expert so you can get the best policy, set up in the best way, and have peace of mind knowing that your most important resource – your income – is protected.

Don't wait for the unexpected to happen. Contact me today for a free consultation and let's discuss how income protection can safeguard your financial future.