Should you cancel your income protection to save money?

Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon. 

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Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon. 

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Income Protection

Are you one of the many people looking through your monthly bills right now, thinking about what could go to save yourself some money? Have you suddenly remembered you’re paying £38 per month for an income protection policy you’ve never used? We get it. And you’re certainly not alone.  

The cost of living crisis is forcing many of us to consider much more carefully where our money is going and how we could make smarter savings here and there. Perhaps you have already cancelled some monthly luxuries such as TV subscriptions, personal training sessions, dog walking or gym memberships?

Should you cancel your income protection to save money?, Vantage Mortgages

You might come across an old income protection policy, life or critical illness cover. 

You’re tempted to cancel it. 

You’ve not needed it so far, right?

Before you do, please take a moment to find out why, you should actually be doing the opposite – making sure you’ve got the very best income protection for your life and your family. Even though that might mean a few more pounds here and there. 

Here’s why… 

When you take on a mortgage it is probably the biggest debt you’ll ever have. It’s often not even referred to as a debt but let’s not forget that it is and think of it instead as just ‘something we pay every month’.

If you fail to repay your mortgage, you can be repossessed. The stark truth. It’s plastered as a warning over all our content, website and documents. You can’t miss it. So why do so many people fail to have the right level of insurance and income protection to protect themselves against this reality?

Taking out cover to make sure that your mortgage can still be paid if you fall ill or have an accident or ensuring your family can stay in your home if you die, is vital (in our opinion) in times where interest rates were lower and people had more disposable income. But now that interest rates are higher and the cost of living is soaring, it’s EVEN more important. 

You see, if we take a step back to when fuel, utilities and food were less expensive you may have had more disposable income and savings that could have been used to get you by and pay the mortgage if you fell ill or had an accident. (By the way this is NEVER recommended because it’s not feasible long term and doesn’t necessarily allow you or your family to live how you have been used to). However, we have known clients to decline insurances for this very reason.

Others will reassure themselves that their family will step up and provide financial help should they need it – again this is NEVER recommended as adequate cover either, but it has been used as a justification for not having any policies to cover major income losses. 

Should you cancel your income protection to save money?, Vantage Mortgages

But now, with the financial situation the way it is, our money isn’t stretching as far. Firstly, 

Would you actually have the disposable income that you had a couple of years ago? And secondly if you were going to rely on family financial support (which you shouldn’t) would they have the savings or disposable income to help you? Maybe they have, but for how long could they pay your mortgage for? 

Not wanting to go into medical questions, ‘it won’t happen to me’ attitude, my job is 100% secure, work benefits and death in service. And not forgetting my personal favourite – ‘I can’t afford it’. (In this case I have serious concerns that the client shouldn’t be taking on a mortgage at all.) We’ve heard every reason for people failing to protect their income, their mortgage and their homes. But before you create your excuse or even worse, cancel good cover you already have in place, ask yourself – is your phone insured? Your car? Your pets? 

So why shouldn’t your income be protected? 

And lastly ask yourself, if your income stops, who will pay your mortgage? For more information, please contact us.

Why Vantage?