With the credit crunch biting down stronger than ever, households across the UK – and the world over – have had to reassess their expenditures. It seems that everything from luxuries, such as holidays, to everyday expenses like food shopping and utility bills are now under tight scrutiny in the name of saving every little bit possible.
However, while it’s necessary for households to cut back on costs during economic hardship, many are going as far as cutting out essentials – like insurance. Whether it’s insurance for your home, life or car, protection is an absolute necessity – particularly during an economic crisis. That’s because if anything were to happen, insurance would offer financial protection from having to cover the full costs that result.
Uninsured individuals, however, might find they’re unable to handle such costs on their own – whether it’s to repair a car after an accident or to replace costly items from a home burglary. Moreover, certain types of cover, like car insurance, are a legal requirement in the UK – so foregoing it is essentially breaking the law.
But while various types of insurance are always important to have – especially during the credit crisis – certain insurance products have taken a significant leap in importance and relevance during the economic slump. Income protection insurance is one such product. This type of insurance enables you to pay your bills in the event that you become sick or have an accident; however, with finances tightening on many households, this product is particularly important to have. Whereas before, families might have had reserve funds for situations such as illness or accidents preventing income, many don’t have the luxury anymore due to so many other financial pressures.
If you’re considering purchasing income protection then there are a few things to keep in mind. Firstly, there are various levels of income protection – so ensure you do your research and ask all the necessary questions to ensure you end up with the cover that’s right for you. A basic level of income protection, for instance, offers to pay a regular, fixed income and does not take inflation into account. However, you can also secure inflation-linked protection, which adjusts your payment in accordance with inflation and the Retail Prices Index (RPI). An insurance broker can help you determine which type of income protection is right for you.
In light of the current economic crisis, from having such a policy in place you can rest easier knowing that you and your loved ones are protected in the event you’re unable to work due to an accident or illness.