One way to decide what kind of cover you need is to weigh up the risks and benefits of protection insurance against the cost and coverage.
It’s up to you to decide what’s important to you and how you’ll protect it.
The first step is to set yourself a goal. What do you most need to protect?
This could be:
- providing for your children
- covering your mortgage payments
- making sure you have an income, whatever happens.
Second, consider what protection you already have. For example, if you’re employed you might have:
- a benefits package that includes a form of life insurance, or
- income protection for a set period if you find yourself unable to work due to illness or injury.
Similarly, certain packaged current accounts might also include some forms of insurance cover.
Third, and finally, work out what protection insurance you want based on the cover you already have and what you want to protect.
For example, if you’re self-employed and have children you might decide to get income protection insurance to cover you in case you become unable to work. You might also want life insurance to make sure your dependants are taken care of when you die.
But if you have children and are employed by an organisation which has a ‘sick pay allowance’ in its benefits package, you might feel you just need life insurance.