The pandemic has highlighted the importance of having a financial safety net. This may be in the form of savings to cover unexpected bills such as a new boiler, or a period of unemployment.

Insurance also has an important role to play, particularly when it comes to protecting your finances through periods of ill-health. Covid-19 has certainly shown the indiscriminate nature of illness, and how a ‘it will never happen to me’ attitude can be suddenly shattered.

State benefits

The pandemic has also highlighted the relatively low levels of help available from employers and the state. There is certainly no fallback furlough scheme paying 80% of wages for those who are unable to work through injury or illness. Although some do pay more, employers are only obliged to meet Statutory Sick Pay requirements, paying £96.35 per week for 28 weeks. Thereafter, those still unable to work have to apply for Universal Credit, currently just £411.51 a month for single claimants over 25 (including the £20 temporary uplift to the end of September).

Income protection

These policies insure a portion of your take home salary and pay out if you are unable to work through ill-health. This can cover mental health conditions such as stress and depression, as well as physical conditions. Definitions and what is covered vary between product providers.

Payments start after a deferral period, so you can set up the insurance to kick in when support from your employer ends if you have one. If not, you may want payments to start sooner. You will need medical evidence to support a claim and money is paid monthly.

Critical illness

This pays out a one-off tax-free lump sum if you are diagnosed with one of the serious conditions listed in the policy. These include most cancers, heart disease and stroke. Payments can be used to pay off an outstanding mortgage or other debts, or simply to provide a financial buffer to give you time to recover from a serious illness.


* Life Assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse.