I’m single and need to protect myself – what cover is right for me?

Arranging the right type of protection insurance can seem like a bit of a maze. If this is the first time you have considered it then hopefully you will find this a useful aid and it will point you in the right direction.

When considering arranging protection insurance it’s important to take into account your circumstances and what situations could leave you in a vulnerable financial position.

Do I need Income Protection?

For most single people the most important product you should consider is an Income Protection policy.

Income Protection Insurance helps to protect your income if you were unable to work, as a result of an accident or sickness. The most common reasons for claims are back problems and mental health issues.

This cover should be arranged to dovetail any sick pay arrangements provided by your employer so that the benefit starts to pay out as your sick pay stops. This cover would probably be even more relevant if you are self-employed or if you are a director of a small business.

Having an Income Protection policy in place would mean that you will still benefit from the security of an ongoing income and you can concentrate on getting better without the stress of worrying about money.

Do I need Critical Illness Insurance?

In some circumstances having a Critical Illness Insurance policy would also make sense. This type of policy would pay out a lump sum in the event of you being diagnosed with an illness covered by the policy.

Most critical illness policies cover between 40 – 80 specific conditions, but it would pay to take advice as the ‘policy wording’ can differ tremendously between one policy and the next. All Critical Illness Insurance policies cover certain cancers, multiple sclerosis, heart attacks, strokes, kidney failure, coronary artery bypasses, and major organ transplants.

This type of policy would probably not cover you if you had a bad back or were diagnosed with stress or depression unless the diagnosis resulted in you being assessed as never being able to work again.

Critical Illness Insurance cover may well be suitable, probably as well as an Income Protection policy, if you have a mortgage. For example, if you were diagnosed with cancer, and the diagnosis meant that you were unable to work for a year or two whilst you underwent treatment, an Income Protection policy would start paying you a monthly income, and a critical illness policy would pay you a lump sum, which you could use to pay for treatment, pay off some or all of your mortgage, or simply put it into your bank.

Do I need Life Insurance?

Life insurance is probably the least relevant policy for a single person. A life insurance policy is usually beneficial if you have dependents who require the security of a lump sum if you pass away. Probably the only circumstances where life cover is suitable if you are single would be to pay off a mortgage or to leave a lump sum for someone specific in the event of your death, but even in these circumstances, it would probably be worth you taking some advice.

Susan is a 33 year old Marketing Manager. She’s single, a non-smoker and currently rents her property. She’s concerned about putting a policy in place which would provide her an income if she couldn’t work, because of an illness or as the result of an accident. She earns £29,000 a year and her employer provides 1 month’s sick pay.

If she were to choose a comprehensive Income Protection policy, this would pay a maximum monthly benefit of £1,450 a month after a waiting period of 4 weeks. The benefit would continue to pay out until she reaches the age of 65 or until she is able to return to work, for a monthly premium of £41.16.

Alternatively she could arrange a Short term Income Protection policy which would only pay the benefit for a maximum period of 24 months for any one claim, for a monthly premium of £15.69.

A comprehensive critical illness policy which would pay out a lump sum of £100,000 if she was diagnosed with a critical illness, covered by the policy, before reaching the age of 65 would cost from £43.89 a month.

A more basic critical illness policy which would pay out a lump sum of £100,000 if she was diagnosed with a critical illness, covered by the policy, before reaching the age of 65 would cost from £32.63 a month.

Quotes correct as of Dec 2018 Please note that the premiums provided are indicative only and based on this specific example, which is shown for information purposes only. Your own circumstances will determine whether the amount payable is more or less than the figure quoted.