Blog

Life works in unprecedented ways and unfortunately, most people today are left with nothing following a long-term injury and illness. They leave themselves and their families vulnerable, with no income to ensure survival. It can happen to you, too—with no clear timeline as to when you’ll be cleared back for work, how will you be able to cope financially? 

Fortunately, sound financial planning and policies can help protect you from such instances. One of the best on the market is critical illness coverages and income protection policies, both of which have been designed to help you gain access to income in the event of an accident or illness. 

The question now stands: which is the best one for you? Today we dive into each policy, as well as their protection promises. Let’s begin.

A Deeper Look Into Critical Illness Insurance 

A critical illness insurance policy essentially pertains to a lump sum payout, if you are diagnosed with a critical condition. The illness should meet the definition set out by your insurance company’s covered conditions. 

The lump-sum provides you with financial leverage in a period you need the most, which helps ease the burden of medical costs and recovery. With such an amount of money, you will be able to focus on recovery, all the whole having means to pay mortgages, utilities, and even groceries. 

What illnesses are covered?

As previously stated, the number of illnesses covered by critical illness insurance policies varies. The final list depends on your insurance company, but it usually includes up to 150 types of conditions.

Who’s it best for? 

If you’re someone seeking to get a tax-free, lump-sum payout, this policy is the right choice for you. Some policies also cover your children, should they fall critically ill.  

A Closer Look Into Income Protection 

Also known as permanent health insurance, income protection policies work just like paychecks. It pays the policyholder a regular income, if they become unfit to work because of an illness or injury. While the country offers state benefits like the statutory sick pay, these only offer you a small amount of income. If you’re raising a family, relying solely on state benefits can send you into financial ruin. 

Through the help of an income protection plan, you ensure the continuity of quality of life, especially if you have children to worry about. This way, you can focus on recovery and still pay for your monthly bills. 

How does the income protection plan work?

Unlike critical illness coverage, this policy is priced based on a variety of factors. Your health, job, and payout preferences are taken into consideration, but regardless of your existing conditions, you will be able to receive a monthly income for your needs. 

Who’s it best for?

If you wish to add an extra layer of protection, this plan is best for you. You’ll be able to pay out until retirement, should you be unable to go back to work. Plans are also individually tailored, making it affordable according to your income. The payments are also tax-free. 

Ensuring A Financially Fit Future 

The unpredictability of life is a certainty we all need to face, and while it can be frightening, there are ways to keep your family protected. Through the help of a critical illness coverage or an income protection plan, you will be able to recover from an accident or an illness comfortably. While the differences are aplenty, both coverages offer you the stability you need—ultimately, whatever you deem best for you should be your decision.

To help aid your decision-making process, however, seek the help of a financial adviser in Cardiff. Harry Robinson Wealth Management offers the best specialists, all of whom offer you the opportunity to live better and financially healthier lives. Allow us to guide you to a brighter future, no matter what life throws your way. Reach out to our team today. 

*Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.