Your income pays for everything else, the mortgage, your family's day to day life, your plans for retirement. Protection planning is about making sure all of that keeps standing if your health, or your life, doesn't go the way you expect.
Most people insure their car, their home, even their phone, but the income that pays for all of it is often left completely unprotected. If illness or injury stopped you working tomorrow, how long could your household keep going as it does today?
The numbers back this up. UK insurers paid out a record £8 billion in protection claims in 2024*, with cancer the single biggest reason for a critical illness payout, according to the Association of British Insurers. Income protection, critical illness cover and life insurance exist to make sure a health setback doesn't also become a financial one.
Without the right cover in place, a serious diagnosis or bereavement doesn't just affect your health or your family's wellbeing, it affects the mortgage, the school fees, and every other bill that keeps arriving regardless. At Skybound Wealth UK, we treat protection planning as part of your wider financial plan, not a one-off purchase, so your family's plans don't have to change if your circumstances do.
If illness or unemployment stopped your income tomorrow, how long would your savings cover your outgoings? Most advisers recommend keeping a rainy day fund of at least three months' expenditure, yet research consistently shows that most people hold far less than that in reserve.
An income protection policy picks up where that rainy day fund runs out. If you're unable to work because of a long term illness, it pays you a regular income, either for a set period or until you reach 70, so your household bills keep getting paid, leaving you free to focus on getting better.
No one expects a serious diagnosis, but the statistics make clear it's far from rare. Nearly 1 in 2 people born in the UK in 1961 will be diagnosed with some form of cancer during their lifetime, according to Cancer Research UK.**
Critical illness cover pays out a lump sum on diagnosis of a specified condition, giving you the breathing room to cover medical costs, pay down debt, or simply take time away from work without the added pressure of money worries.
Life insurance makes sure the people who depend on your income aren't left to deal with money problems on top of everything else. There are two main types to choose from.
Whole of Life cover lasts for as long as you live, provided premiums are paid, and pays out a guaranteed lump sum whenever you die, whether that's next year or in forty years' time.
Term cover lasts for a fixed period that you choose, commonly matched to the length of your mortgage or the time until your children are financially independent. Because cover ends at a set date rather than running indefinitely, it's typically the lower cost option of the two.
Protection needs change as life changes: a new mortgage, a growing family, a new business, or a change in health can all shift what the right cover looks like. At Skybound Wealth UK, our advisers start by looking at any cover you already have, including anything provided through an employer, and your wider financial position, before recommending what, if anything, needs to change.
Recommendations are explained in plain terms, and cover is reviewed on an ongoing basis so it keeps pace with your circumstances rather than the policy you took out years ago.
At Skybound Wealth UK, protection planning sits alongside your investments, pensions and other financial planning, so the cover you have in place reflects your actual circumstances rather than a generic policy. Getting this right now means one less thing for your family to deal with later.
At Skybound, we want to help you protect and preserve the wealth you’ve worked so hard to build. Our team of experienced advisers will help you every step of the way to financial prosperity and security. Let us guide you in the right direction and we will help you soar towards financial freedom.
They cover different things, and many people benefit from holding both. Income protection pays you a regular monthly income if you're unable to work due to illness or injury, for as long as you're off work, up to a set age. Critical illness cover pays a one off lump sum if you're diagnosed with a specified serious condition, which can go towards medical costs, paying off debt, or adapting your home. One replaces ongoing income, the other gives you a cash buffer at a single point in time.
Level term insurance provides a fixed amount of cover for a fixed period, for example £200,000 over 20 years. Unlike decreasing term cover, the payout amount doesn't reduce over time, which makes it a better fit for interest-only mortgages, or for simply providing your family with a set lump sum regardless of when within the term you die.
Often, yes. Workplace life cover, sometimes called death in service, typically pays out a multiple of your salary, commonly two to four times, which may not be enough to clear your mortgage and support your family long term. It also usually ends the day you leave that employer, so if you changed jobs tomorrow, that cover would disappear with it.
Decreasing term insurance is built around a repayment mortgage. The amount of cover reduces each year in line with your outstanding loan balance, so it's usually the cheapest way to make sure the mortgage gets paid off if you die before it's cleared. If you have an interest-only mortgage, this isn't the right type of cover, because your loan balance doesn't reduce in the same way.
The best time is whenever someone depends on your income, a partner, children, a business partner, or anyone with a joint mortgage. Cover gets more expensive the older you get and the less healthy you become, so taking it out when you're young and well usually locks in a lower premium for the life of the policy.
You can reach us directly by calling us between the hours of 8:30am and 5pm at each of our respective offices and we will immediately assist you.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
The guidance and/or advice contained within this website are subject to the UK regulatory regime, and are therefore targeted at consumers based in the UK. Skybound Wealth UK is a trading style of Skybound Wealth Management Ltd who are authorised and regulated by the Financial Conduct Authority. Registered Office - Alum House Suite 12, Discovery Court Business Centre, 551/553 Wallisdown Road, Poole BH12 5AG. Registered Number 04479650, England. Financial Conduct Authority Number 217994.
The information contained within this site is subject to the UK regulatory regime and is therefore targeted primarily at consumers based in the UK. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk. Neither Skybound Wealth Management Ltd nor its representatives can be held responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
