Why do we insure our car? Apart from the fact it is a legal requirement to drive on the road, we need to make sure we can still get about if anything happens.

So why don’t we do the same with ourselves? Insuring our incomes and also ourselves is something most of us don’t consider important because ‘it won’t happen to us’.

Questions to ask yourself are:

• If you were off work through long term sickness or if you had an accident or if you were struggling with mental illness, how long will your employer pay you for? Don’t assume they’ll look after you – check what your benefits are. How much income would you need replacing?

• If you suffered a major illness, for example cancer, heart attack or a stroke how would this impact on your ability to carry on working and earning money? Would a lump sum of money help you make lifestyle choices and take the pressure off having to work when you’re really poorly?

• What would you want to happen to your home if you died? Would you want your relatives, partner, parents to inherit this? If the answer is yes, then of course they can sell it to realise the value, however did you know they cannot do this until probate has been granted? This can take months or sometime even years! If there is a mortgage on your home, the lender will still want paying, so who’s going to continue to make payments until its sold?

As with a car, we can take out insurance on the basis of ‘just in case’.

Life cover – Is designed to pay a lump sum of money on death. You can insure any amount as long as your adviser can justify the figures. You can insure yourself for a specific period of time or for the whole of your life. Each person’s needs are different which is why there are different polices you can use. It is also possible to have a regular amount of money paid out to dependants rather than it being paid as a lump sum.

Critical Illness cover – This is also designed to pay a lump sum of money but instead of it paying out on death, this pays out on the diagnosis of a major illnesses, for example cancer, heart disease and stroke to name a few. Each insurer has a different list they cover you for however, most have around 35-40 specified conditions. Again, you can choose any amount as long as its justifiable and you can insure yourself for a specific term or the whole of your life.

Income Protection – This is different to Critical Illness cover. Its designed to replace most of your income if you are unable to work through accident, long term sickness or disability. This type of protection pays a regular income, tax free. The amount can be anything from just covering your basic outgoings, to as much as 65% of your gross earnings. This can be arranged to pay out for a short amount of time, like a year or right the way up until you retire. It is normally set up to start paying you a regular income once your employer stops paying you.

All these policies are standalone plans, the important thing to remember is they don’t have to be linked to a mortgage. As long as there is a need, its affordable, and justifiable, then you can take out as much as you want!