When people think about financial protection, life insurance is usually the first thing that comes to mind. And rightly so. Most of us want the peace of mind of knowing our loved ones would be financially secure if we were no longer around. But financial protection isn’t just about what happens if you die. It’s also about protecting yourself and your family if you’re diagnosed with a serious illness or become unable to work.
Life Insurance
Life insurance provides a lump sum payment if you pass away during the term of the policy.
This can be particularly important where one partner is the main income earner and the other stays at home to care for children or manage the household. If the working partner dies unexpectedly, how would the remaining partner continue to pay the mortgage, household bills, childcare costs and everyday expenses?
Life insurance can help provide financial security at what is already an incredibly difficult time.
Specified Serious Illness Cover
Specified Serious Illness Cover provides a lump sum payment if you’re diagnosed with one of the serious illnesses covered under the policy, such as certain cancers, heart attacks or strokes.
A serious illness can have a major financial impact, even if you’re able to return to work eventually. You may need time off work, private treatment, rehabilitation, home modifications or additional support for your family.
The lump sum payment can help ease financial pressures and give you one less thing to worry about while focusing on your recovery.
Income Protection
Income Protection provides a replacement income if illness or injury prevents you from working for a prolonged period.
This is often the most overlooked type of protection, despite the fact that most households rely on a regular income to keep everything running.
Think about your own financial commitments. Your mortgage repayments, childcare costs, pension contributions, utility bills and day-to-day living expenses all depend on money coming in each month.
If you were unable to work tomorrow due to illness or injury, would those commitments continue to be met? How long could your savings realistically support your household?
Many people are also unaware that Income Protection premiums may qualify for tax relief, helping to reduce the overall cost of cover. Revenue provides further information on the tax relief available for Income Protection policies.
Income Protection can provide an ongoing income to help you continue meeting these costs while you focus on getting better.
Different Covers for Different Situations
Many people assume one protection policy is enough, but each type of cover serves a different purpose:
- Life Insurance helps protect your family if you die.
- Specified Serious Illness Cover provides a lump sum if you’re diagnosed with a covered serious illness.
- Income Protection helps replace lost earnings if illness or injury prevents you from working.
Together, they can form a financial safety net that protects both your family and your lifestyle.
A useful question to ask yourself is not just “What would happen to my family if I died?” but also “What would happen if I was still here, but couldn’t work for six months, a year, or even longer?”
For many families, that scenario could have just as significant a financial impact. That’s why reviewing your protection arrangements regularly is one of the most important financial planning steps you can take.
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