Income Protection: The Right Time to Talk About a Back-up Plan

Most of us manage to get by on our monthly wage with some savings for a rainy day, but what would you do if you became ill or were injured and had to stay off work for a long period of time?

When I read this my immediate reaction was that we barely manage to get by as it is, and would definitely be up a certain creek if Steve were unable to work.  I had heard of Income Protection, but wasn't really sure what it was.  I learnt that having an Income Protection policy means that if you can't work for a long period of time due to illness or injury, a significant amount of your monthly income will be replaced so you won't be left high and dry financially.

I was surprised that a whopping 11% of people have to take 6 months or longer off work during their working life, so Income Protection is well worth looking into. How long would you be able to stay afloat financially if you were off sick?  Most people think their employer will pay them full salary, or at least a large proportion, for up to 6 months if they go off sick, the reality is unfortunately very different.

Shockingly, only 64% of private companies only offer their employers Statutory Sick Pay (SSP) if they are off work for longer than four consecutive days.  This is the legal minimum they are required to offer by law, and means that their employees are only entitled to £85.85 a week (in the current tax year), representing a significant drop in salary for many.  Therefore, it is well worth looking into a back-up plan for if you find yourself in that 11%.

When Mumsnet and Unum asked if we would be interested in discussing Income Protection with Steve's work, I thought it would be a great idea.  Apparently, the easiest way to get Income Protection is through work.  Your HR department (or in a smaller company your office manager or MD) should be able to help you set up an Income Protection plan, just like they would a pension.  But how do you start that conversation?

We were both rather daunted at the prospect, but took Unum's advice about talking to colleagues first and gauging their thoughts, support and ideas.  Steve also made sure to find out exactly what his company currently offers employees, by checking his contract and verifying it with his line manager.

From there he sat down with her and discussed how the whole company might benefit from Group Income Protection, which is how Income Protection arranged through your employer is known.  The benefits of doing it as a group are that the costs will be reduced, as they are spread amongst more people, so the risk sare lower, and also that pre-existing conditions are likely to be covered - a real bonus for some of the employees at Steve's work.

Unum is a leading provider of Income Protection in the UK, and they want to get people thinking about what they'd do if they needed a back-up plan.  To learn more about Income Protection, head over to the Mumsnet website where you can read all about what you need to think about, plus how and when is best to approach your employer. You can also see how some Mumsnetters managed to get by living on just £85 a week.

And Steve's work?  Well, they're currently looking into how they can improve employee benefits, and hope to finalise something very soon.  Good luck setting up your back-up plan too.

Disclosure: I am a member of the Mumsnet Bloggers Network, a group of parent bloggers picked by Mumsnet to review products, services, events and brands. I have been asked by Mumsnet and Unum to blog about income protection. I have received a voucher for this blog post but I have editorial control and retain full editorial integrity.

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