Income protection pays a regular sum if you can’t work due to a medium to long-term illness, injury or disability. It is designed to replace part of your income. You must be in full-time employment or self-employed in order to take out this type of insurance. It can be especially important where there is no other income coming into the household, and very little or no sick pay – as would be the case if you are self-employed.

If your career means you cannot get income protection, why not discuss a wage protection option with your planner?

A life assurance policy will pay out a lump sum or a regular income to a named person, such as your spouse or child, on your death. You can select a limited term during which this will occur – for example you might only want it while your children are financially dependent – or you can choose a ‘whole of life’ policy which will pay regardless of whether you die within a certain term or not. You can have single, joint or dual cover. Joint cover will pay out only when the first death in a couple occurs; dual cover will pay out on the death of both parties.

 This policy pays a lump sum if you are diagnosed with a serious illness or disability specifically covered by your policy. For this reason it is sometimes called serious illness cover or critical illness cover. There are a few things to bear in mind about this sort of policy – it pays out a lump sum rather than a regular income and it only covers the illnesses or conditions that are specified in the policy, so if you can’t work because you have an illness not mentioned, you cannot claim.