Income protection is something a lot of us overlook. However, you need to ask yourself what would happen if you found yourself unable to work? Could you survive without your income? What impact would this have on your family? Most people would find it virtually impossible to cope financially. Keeping that in mind, read on to discover some smart tips on how you can protect your income.
Adopt Money Saving Habits
- Look for ways of making money on the side – One of the best ways to protect yourself is to ensure you have several different streams of income. This will minimise the impact if you do lose your job.
- Build an emergency fund – When things are going well, you should save money for a rainy day. Most experts advise saving three month’s worth of money. Therefore, if you spend £1,500 a month on rent and living expenses, make sure that your emergency fund has at least £4,500 in it. This then gives you a good three months to find another job.
- Consider passive streams of income – This relates to income that you will receive regularly on a year-to-year basis. Examples include investing in shares and network selling. This is a long-term solution – don’t expect to see returns from day one.
Consider Critical Illness Insurance
You should think about taking out a critical illness insurance policy. This type of insurance will ensure that you are protected should you be seriously injured or if you have become very ill. If you take out critical insurance, and you sustain one of the injuries or illnesses that are covered, you will receive a lump sum of cash to ensure that you do not suffer financially due to your inability to work during this period. Every policy is different, yet some of the most common illnesses that are covered include strokes, heart attacks, major organ transplants, cancer, paralysis, and such like. If you are unsure regarding what policy to go for, don’t worry, as Taylor Brunswick Group have an abundance of experience in this area, and we will ensure you end up with the best insurance plan for your financial situation.
Acquire Income Protection
Finally, income protection is another type of insurance you are advised to have, and it is something that we at Taylor Brunswick can also assist with. This is a form of insurance that pays you if you are not able to work because of illness or injury. Unlike critical illness insurance, where you receive a lump sum, and you have to have a severe injury or illness, with income protection you are paid until you return to work, your retirement, or your death. It is important to note that income protection is not designed to assist those that have been made redundant. It has been created for individuals that are physically unable to work, and payouts are usually determine based on a percentage of how much you earn.
To conclude, if you follow the three key tips that have been provided in this article, you will give yourself the greatest chance of protecting yourself should you be unable to work because of an illness or injury or you have lost your job for any other reason.
Managing Partner in Taylor Brunswick Group. A Hong Kong-based wealth-management firm that offers expert wealth management advice that will increase the potential to maximize growth for any individual or businesses.