Income protection meant I could focus on recovering, not worrying about my mortgage
It’s easy to think of critical illness as being something that happens to other people, not ourselves. Louisa Fletcher’s story shows how accidents and serious illness can affect even the healthiest people.
By Louisa Fletcher, property expert
Up until my early thirties, I was always more of a spender than a saver. My thought process being that as I worked hard, why shouldn’t I enjoy the money I’d earned and spend it on the fun things in life? Like holidays. And shoes.
Eventually though, not long after my thirtieth birthday, the time came for me to arrange a mortgage for the apartment I was buying at the time.
My financial adviser recommended that as I lived on my own, it wouldn’t be a bad idea to put a couple of ‘safety nets’ in place. The first being to save a regular amount to build up a ‘rainy day’ fund, and the second was to take out Income Protection Insurance, in the event of a ‘what if’ scenario.
My adviser’s view was that, as I had no partner to support me, who would pay my bills if I couldn’t work for any reason?
Setting up an emergency fund
The first suggestion made absolute sense to me and actually made me realise I should have done it earlier. I had capital in my property, but I wasn’t a regular saver as such, and I could see that having an emergency fund I could access quickly should I needed was a sensible idea.
So, I set up a standing order that meant on the first day of each month, along with the mortgage and direct debits for all my bills, an amount went into my savings account.
This meant that any money left in my account after that was ‘mine’ to spend, and I didn’t miss the amount I was saving. I also made a point of putting any money I was left with at the end of the month into my savings as well, no matter how small the amount.
For a couple of years, I’d stashed away a nice little nest egg and vowed to myself that I’d keep the habit up.
Protecting my income
Putting Income Protection Insurance in place took me a bit more convincing though. At the time, I was training to run my first half marathon and was in the gym at least three, if not four times a week. I was fastidious about taking my vitamins and supplements and really paid attention to my diet to make sure I was eating all the right sorts of foods and consuming enough calories as part of my training regime.
When I moved home and registered with my new local surgery, the doctor who carried out my initial health check said that I was one of the fittest and healthiest people she’d seen for a long time.
It never occurred to me that I might develop any kind of significant illness. I felt ‘flameproof’. But my financial adviser gently persisted and, following her advice, I begrudgingly agreed to put Income Protection Insurance in place.
I’ll spare you all the details but suffice to say, life has a funny way of reminding you that you aren’t infallible, just when you least expect it. In my case, following months of working very long hours and probably a bit too hard, plus pushing myself with my training for yet another half marathon, I developed what I thought was flu.
It never occurred to me that I might develop any kind of significant illness. I felt ‘flameproof’.
Carrying on regardless, I completely ignored the fact that anything serious was wrong and that I felt utterly dreadful, until eventually while at work and in an important meeting I collapsed. Then woke up in the hospital.
I had health insurance as part of my salary package, so I was fortunate enough to be treated privately where I was quickly diagnosed with a rare viral infection (called Guillain-Barré syndrome) and received specialist treatment, which I’m grateful for to this day.
However, it took me over a year to recover, meaning I couldn’t work. I count myself exceptionally lucky though, as many people face life-threatening or life-changing illnesses, so it could have been far, far worse.
Recovering, not worrying
The financial provisions I’d made previously meant that my bills got paid over that period, so I could focus on getting better, rather than having to worry about money. Looking back now, I shudder to think what the alternative would have been.
Without doubt, with her persuasive rationale, my financial adviser ensured that I didn’t end running up a significant amount of debt, or worse, facing repossession. I’ve often told her since that I’ll never be able to thank her enough, but she says that she was “just doing her job”.
I do realise that I was fortunate enough to be able to afford to take out Income Protection Insurance in the first place; but for what it cost – less than a monthly Sky subscription or a meal out – it was pretty straightforward to prioritise.
These days, when I talk to people about my personal experience of income protection, I suggest that they build the cost into their monthly expenditure from the outset, particularly if they are first time buyers or taking out a new mortgage.
By factoring it in the same way as you do for buildings and contents insurance, and including the costs for Income Protection Insurance into your monthly budget from the start, you really are giving yourself the best safeguard if you’re unable to work as a result of accident or illness.
As for me, well I’ve still not quite gotten around to training for marathons again. But maybe, 2020 is the year I do.