When it comes to financial protection, how much is really enough? Both life insurance and income protection can help protect your family's financial well-being, but can they be combined? Let’s break it down.
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What is life insurance?
Life insurance is designed to provide your beneficiaries with a lump sum payment in the event of your death. Each month, you pay a monthly premium to your insurer to remain covered.
There are different types of life insurance cover, mainly whole and term life insurance.
Whole life insurance covers you for the rest of your life, whereas term life insurance covers you for a set number of years.
The cost of your premiums will depend on how much cover you require, as well as factors such as your age and health. Learn more about how life insurance works.
What is income protection?
Income protection insurance is a product specifically designed to support you financially if you are unable to work due to illness or injury. When the policy is triggered, it pays out a percentage of your monthly salary (typically between 50-70%) so you can maintain your standard of living.
This type of cover could help you pay for essential expenses, such as mortgage payments, utility bills, and groceries, even when you are unable to work.
Income protection policies vary in terms of cover, which can range from a few months to retirement, depending on the policy terms. It also comes with a waiting period known as a 'deferred period'.
Can you get life insurance and income protection together?
Income protection can be purchased as a separate policy on its own or alongside a life insurance policy.
When combined, you'll have the benefit of being covered by life insurance as well as having income protection alongside it. This approach can also mean you have comprehensive financial protection for both long-term security and short-term income needs.
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Why should I have life insurance?
What would happen to your family if you passed away unexpectedly? Would they have enough support to get by? If not, life insurance could be a great investment.
On its own, life cover is great for giving your family peace of mind, helping them remain financially secure in the event of your death. The money from your policy could be used for all sorts of purposes, which makes it a versatile tool.
It could be used to pay off outstanding debts, such as a mortgage or personal loans, or to cover your funeral expenses. If you have a term policy, you can tailor the length of the policy to match your goals and circumstances.
Why should I have Income Protection Insurance?
Illness and injury can happen at any time, perhaps as likely as death. A serious illness or injury could leave you unable to work for a lengthy period. While you may receive sick pay from your employer it may not be enough to cover your household income.
Without a steady income, everyday expenses and bills can quickly pile up, adding stress to an already challenging situation. Having income protection cover means that you won't have to dip into savings or rely on external help, such as borrowing money or family support, to stay afloat.
Why should you have both?
Life is unpredictable — whether it’s illness, injury, or worse, your finances can take a serious hit. That’s why having both life insurance and income protection can be a smart move, but whether you need both depends on your circumstances.
If you're young, single, and don’t have a mortgage or dependents, life insurance might not be a top priority. However, income protection could still be worth considering — especially if you work in a high-risk job where an injury could leave you unable to earn.
On the other hand, if you have a mortgage, a family, or a partner who relies on your income, both types of cover can provide essential financial security. Life insurance can help your loved ones if something happens to you, while income protection helps you keep up with everyday expenses if you’re unable to work.
By having both, you’re covering all bases — protecting your family’s future while also making sure you can manage financially if things go wrong.
Before making a decision, it’s worth speaking to a specialist to compare the cost of combined policies versus separate plans. In some cases, purchasing them individually might be the more cost-effective option.
Get advice on life insurance and income protection
Before you commit to a policy, it’s worth getting advice, especially if you are unsure about your options.
At Cavendish Online, our team of helpful advisers is well-equipped to guide you through the intricacies of life insurance and income protection options. They can offer personalised advice tailored to your specific needs and financial situation.
With our support, we can help you understand the nuances of each type of insurance and explain the benefits and limitations of different policies.
Call the Cavendish Online team today on:
01392 436 193
(Monday to Friday, 9am - 5.30pm)
