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Protecting yourself and your family

4 mins read
by Nick Green
Last updated Wednesday, April 10, 2024

Protecting your family's income and financial security in case of illness or injury that stops you earning.

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Why do you need protection?

When you enjoy a regular income, it’s easy to take it for granted.

The reality is it only takes one serious illness, injury or death to have a devastating impact on a family’s finances.

Putting the right insurance policies in place can give you peace of mind your family will have a safety net if the unexpected happens.

As life can throw up so many different hazards, there are types of protection available for each kind of circumstance.

What if I die or my partner dies?

Life insurance can safeguard your family’s future in the event of your death.

You pay monthly premiums, and it pays out a lump sum if you die before a certain time, such as before your mortgage is paid off.

This can be invaluable if you are a major or sole household earner. Life insurance providers have a good record of paying out on claims, with a payout rate of around 98%.

If you have a mortgage, life insurance to cover the mortgage term is highly advisable, so if you have a partner or dependents, you should consider getting a policy. 

This ensures the mortgage will be paid off in full if you should die. However, you don’t have to choose the policy your provider offers.

An insurance broker can help you find one better suited to your personal needs.

Some kinds of life insurance can mitigate the effects of inheritance tax (IHT) if it's put in trust.

The policy pays out upon the holder’s death, but any beneficiaries won't have to pay IHT on it. 

Talk to a financial adviser about setting this up to ensure you get it right.

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What if illness or injury stops me working?

How would you and your family cope if an illness or injury kept you off work?

Employers typically offer sick pay for a limited period, so if your condition lasts longer, you may need an alternative source of income.

You have many options to guard against this situation. Accident and sickness insurance will pay you a regular income, typically for 12 months.

If you want to cover yourself for a longer period of incapacity, you may prefer income protection.

This is more costly, but it can replace between 50% and 70% of your earnings for an unlimited period, so it can keep paying out even if you never return to work.

Instead of (or in addition to) a replacement income, you may want a lump sum – in which case you could look at critical illness insurance.

This will provide you with a single large payment lump sum if you are diagnosed with a ‘critical illness.’ Qualifying conditions include heart attack, stroke, cancer, multiple sclerosis and many others.

Different policies cover different illnesses and some may be excluded, so have your adviser check the details carefully before taking out any policy.

For each kind of insurance, you can set the level of income or lump sum you require, but higher amounts will mean higher premiums.

To decide which type(s) suit your needs best, talk to a financial adviser who specialises in protection policies.

What if I want private medical care?

Private healthcare is increasingly popular among those who can afford it.

There are many providers, some offering perks like gym memberships and cash rewards, or added benefits such as dental plans.

The main advantage of private healthcare is there may be less waiting involved than using the NHS.

This can mean if you have a condition that prevents you from working, you may be able to get it treated more quickly by going private and getting back to work sooner.

However, talk to an adviser about whether private medical care is the best use of your money.

The other forms of illness protection can potentially deliver better value in the case of a debilitating condition.

How to choose the right protection

When choosing a protection policy, it’s important to have an in-depth grasp of how each works, how and when it pays out, and how it corresponds to your needs and attitude to risk.

There are also many products on the market; comparing them can be difficult since they depend so much on your circumstances.

For these reasons, seeking independent advice is especially important when choosing a protection policy.

An insurance broker can assess your needs, circumstances and risks, recommend the right protection policy, and search the whole market to find the best one for your circumstances.

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Nick Green
Nick Green is a financial journalist writing for, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.