Protecting what matters: life cover, income protection and critical illness

Protection insurance is the part of financial planning people most like to avoid thinking about - and the part that matters most when it is needed. It answers a simple question: if you could no longer earn, or you were no longer here, would the people who depend on you be alright? Here are the three main types and who tends to need them.

Life insurance pays out if you die during the term of the policy. For families, the classic use is to clear the mortgage and provide a lump sum or replacement income so that partners and children are not left with a financial crisis on top of a personal one. A rough starting point is enough to clear debts and replace lost income for the years your family would most need it, but the right figure is personal.

One technical point that matters more from April 2027: writing life policies 'in trust' is often considered. This means the payout can go directly to your chosen beneficiaries rather than into your estate, which can keep it out of the Inheritance Tax calculation and get money to your family faster, without waiting for probate. With pensions coming into the Inheritance Tax net, a trust-held life policy can also be a way to give beneficiaries the cash to settle a tax bill.

Income protection is arguably the most overlooked cover of all, and for many working-age people it is the most important. It replaces a portion of your income if you cannot work because of illness or injury, typically paying out until you recover, retire, or the policy ends. Statutory sick pay is modest and does not last long, and many employers offer only a few months of full pay. Income protection fills the gap between that and a potentially long period out of work.

Critical illness cover pays a tax-free lump sum if you are diagnosed with one of a defined list of serious conditions - commonly certain cancers, heart attacks and strokes, among others. Unlike income protection, it pays once and stops. It can be useful for clearing a mortgage or funding changes to your home and life while you focus on recovery. The detail matters here: policies differ significantly in which conditions they cover and how, so the cheapest is not always the best.

Start with your existing safety net. Many people already have some death-in-service cover through their employer, and perhaps a little income protection - but often far less than they assume, and it usually disappears if they change jobs. The gap between what you have and what your household would actually need is the space protection fills. This is an area where advice can be particularly valuable, as the type of cover, policy definitions, amount and term all need to be matched carefully to your circumstances.

We assess the cover you already have, find the gaps, and arrange protection that's properly matched to your family - often written in trust.