If your income stopped, how would you continue to meet your financial commitments, including your mortgage? Many would struggle, but financial protection could provide a solution.
Employers don’t need to provide enhanced sick pay, and Statutory Sick Pay (SSP) is just £123.25 per week in 2026/27 and paid for up to 28 weeks. If you were affected by an accident or illness that meant you needed to take an extended period off work, SSP is unlikely to fully bridge the financial shortfall you face.
However, when you take out financial protection, you can choose a level of cover that reflects your needs and outgoings. It could provide peace of mind that should something happen, you’ll be able to avoid financial hardship.
Financial protection is a type of insurance that would pay out when certain conditions are met if you’re unable to work. The latest figures from the Association of British Insurers (ABI) highlight how financial protection could provide a financial lifeline to families when they need it most (29 June 2026).
During 2025, ABI members paid out a total of £7.84 billion – the equivalent of £21.5 million every day. Across all forms of protection, more than 95% of claims were upheld.
Taking out financial protection and putting other ways in place to create a financial safety net in case of illness are often tasks that people put off. You might think you won’t need to make a claim. Yet, accidents and illnesses can strike unexpectedly.
Worrying about your finances should you suffer an accident or illness could add to the stress or anxiety you’re already feeling. Having a plan to cover your financial commitments, whether protection or something else, could mean you’re able to focus on recovering.
3 types of financial protection you might want to consider
There are several different types of financial protection, so you can choose an option that suits your needs.
To maintain the cover financial protection provides, you’ll need to make regular premium payments. The cost of financial protection will depend on several factors, from the level of cover you require to your health.
Here are three main types you might want to consider.
1. Income protection
Income protection would pay you a regular income if you were unable to work. This would usually be a portion of your regular salary, such as 60%. The regular income would continue to be paid until you’re able to return to work, retire, or the term ends.
The ABI figures show 79% of income protection claims were upheld in 2025. On average, claimants received around ÂŁ23,400.
Most income protection policies will have a deferment period that will need to pass before you can make a claim. Usually, the longer the deferment period, the lower the premiums will be.
You can typically choose the deferment period that suits your circumstances. For example, if you know you have savings that could support you for three months, you might opt for income protection that would start when your savings are depleted. Similarly, if your employer would continue to pay your income for several months, your choice may reflect this.
2. Critical illness cover
Critical illness cover would provide you with a lump sum payout if the conditions were met. It is designed to provide you with a cash injection if you’re diagnosed with a critical illness, which may allow you to take some time off work, pay off large financial commitments, or adapt your home if necessary.
Critical illness cover may include being diagnosed with cancer, heart attacks, multiple sclerosis, or Parkinson’s disease. It’s important to note that not every illness is covered and how comprehensive a policy is may vary. Be sure to check your paperwork to understand when you’ll be covered before taking out critical illness cover.
The ABI data shows that in 2025, more than 90% of critical illness claims were upheld with an average value of more than ÂŁ69,000.
3. Life insurance
Life insurance would provide your loved ones with a lump sum if you passed away during the term. If your family relies on you financially, life insurance could be important for their security should the worst happen.
You may choose term life insurance, which would last for a defined period. You might link this to your children reaching adulthood or the term of your mortgage. According to the ABI, in 2025, 96.7% of life insurance claims were upheld and, on average, bereaved families received more than ÂŁ83,800.
As the name suggests, whole of life cover provides protection until you pass away, assuming you keep making the premium payments. The level of cover tends to be lower, with an average claim of ÂŁ7,631. 100% of whole of life insurance claims were upheld in 2025.
Get in touch
If you’d like to talk about what financial protection could be right for you and how to calculate the level of cover you need, please get in touch.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.