Protection Insurance Should Be a Key Part of Your Financial Planning

Most of us spend a lot of time thinking about the things we're building - a home, a family, a career, a future. We save, we plan, we make sacrifices, and we work hard to create a life that feels stable and secure for the people we love. 

But how many of us spend the same amount of time thinking about what would happen to all of that if something went wrong?

Protection - life insurance, critical illness cover and income protection - isn't the most glamorous part of financial planning. It's not the part that makes you feel like you're getting ahead, but it is the part that holds everything else together. 

Without it, even the most carefully built financial plan has a gap, and gaps have a way of showing up at the worst possible time. 

What is protection, and why does it matter?

Protection insurance is a family of products designed to provide financial support when life takes an unexpected turn. Nobody plans for serious illness, injury or loss - but having the right cover in place means that if the worst happens, money is one less thing to worry about. 

There are three main types, and they work best when you think of them together as an interconnected safety net rather than separate products. 

	What it covers	What it pays out
Life insurance	Death or a terminal illness diagnosis	A lump sum for your family or dependents
Critical illness cover	Diagnosis of a serious illness - including many cancers, heart attacks and strokes	A lump sum to use as you need - clearing the mortgage, adapting your home, funding your recovery, etc
Income protection	Inability to work due to illness or injury	A regular monthly income, typically until you return to work or reach retirement age

Each type covers a different scenario, which is why having only one can still leave gaps. Together, they cover the situations that matter most. 

The gap most people don’t see until it’s too late

It’s easy to assume that if something serious happened, the state would step in. To some extent, it would, but probably not in the way you’d hope.

Statutory sick pay currently pays up to £123.25 per week. For most households, that covers a fraction of what’s needed to keep up with a mortgage, bills, childcare, and the general cost of life. Savings help, but most people don’t have enough set aside to sustain months, or even years, of reduced income.

The families who struggle most after a serious illness, injury or bereavement aren't usually those who didn't care about protection insurance. They're the ones who simply hadn't got around to it yet. And that's a heartbreaking position to be in - dealing with something devastating, while also worrying about the mortgage, the bills, and how to keep things together for the people who depend on you. 

Protection insurance isn’t one size fits all

One of the most common mistakes in protection planning is treating it as a box to tick rather than a conversation to have. Taking out a basic life policy and assuming you’re covered is a start, but it may leave significant gaps depending on your situation.

The right level and combination of cover depends on things like:

• Your income, and how much your household could manage without

• Whether you have a mortgage or other significant financial commitments

• Whether you have dependents who rely on your earnings

• What your employer already provides - some offer sick pay or death in service benefits

• Your savings and how long they would realistically last

  
  

For some people, a lump-sum payment from a critical illness policy would be the most useful. Allowing them to clear their mortgage and removing that pressure entirely, so they can focus on getting better.

For others, a regular income from an income protection policy gives more flexibility as they recover. Often, a combination of both makes the most sense; however, the right answer depends on your life, not a generic template. 

At Fowler Smith, we look at your specific circumstances, identify the gaps, and help you build protection insurance that’s genuinely useful - not just technically in place. We approach these scenarios as a conversation, not a checklist.

It’s almost always more affordable than you think

Cost is one of the main reasons people put off protection insurance, but it’s almost always more affordable than people expect. We find that most people are genuinely surprised when they find out how little it could cost. Premiums are partly based on your age and health when you take out the policy, so the sooner you sort it, the better value it tends to be.

The cost of not having it, on the other hand, can be enormous. Protection shouldn’t be seen as a luxury. For most people, it’s the most important financial decision they’re not making.

Frequently asked questions

Do I need all three? 

Not necessarily. It depends on your circumstances and what your employer already provides. The right combination is different for everyone - an adviser can help you work out where the gaps are.

Is it expensive?

Usually far less than people expect. Most people are surprised by how affordable protection insurance can be, particularly when arranged while you're in good health.

What if I have cover through work?  

It’s a good starting point, but rarely enough on its own. Employer benefits typically stop when you change jobs, and the level of cover is often lower than people realise. Saying that, it's worth checking whether what you have would actually be sufficient.

When should I think about it? 

As soon as possible, and certainly when your financial circumstances change. Buying a home, starting a family, or becoming self-employed all significantly shift the risk. Each of those moments is a natural prompt to review your protection planning.

Ready to make sure your financial plan is complete?

Protection is one of those things that’s easy to defer, until you can’t. The good news is that a conversation doesn’t have to be complicated, and it might reassure you more than you expect.

At Fowler Smith Mortgages & Protection, we’ll take the time to understand your situation, look at what you already have in place, and help you craft a safety net that actually does it’s job. 

Call us for a friendly, no-obligation chat, because the best time to sort your protection is always before you need it.

Protection products are subject to terms and conditions. Always ensure any policy meets your individual needs. Your home may be repossessed if you do not keep up repayments on your mortgage.