A guide to protection insurance

Why protection insurance?

With any luck, you're employed, you're in good health and you're not struggling with debt. It's enough for plan A. What about plan B? If you can't provide an income, or if health gets in the way? That’s where protection insurance can provide a safety net.

The type of insurance that’s best for you will depend on your responsibilities, and what you want or need to cover.

The main types of protection insurance

Life insurance

Life insurance can provide a lump sum or fixed-term regular income payout to your partner or dependents if you die. It could help to meet any financial commitments like a mortgage or other debts. There are several different types of life insurance, for more information see our guides to the following:

Critical illness cover

Critical illness cover is a worthwhile extension of your life insurance policy. Instead of only paying out on death, it pays out in the event of serious illness – typically cancer, stroke or a heart attack – helping you to maintain your expenses if you're no longer able to work.

Income protection insurance

Income protection can provide regular payouts over a fixed period of time if you're unable to work due to injury or illness (not just those critical illnesses above). The regular payouts are usually a proportion of the salary you were being paid before falling ill.

Payment protection insurance

Payment protection insurance is linked to a specific product, so if you were unable to make repayments due to unemployment or illness, they would continue to be met by the insurer, usually for a fixed amount of time. There are a number of different types, including mortgage payment protection insurance.

Private medical insurance

Also known as health insurance, private medical insurance gives you a payout to cover the cost of getting private medical care if you fall ill or suffer an injury that’s covered by the policy. Some private medical policies now reward healthier lifestyles.

How to get protected

Review your situation regularly to ensure that you’re covered if your circumstances change unexpectedly. To make sure you have the right level of cover to suit your needs, review your protection arrangements with an adviser.

You can compare life insurance quotes from across the market using our real-time life insurance quote tool.

Last updated: 03 June 2015