Living Costs Protection Insurance Explained

Living Costs Protection Insurance Explained

Living Costs Protection Insurance

It’s been reported that every year, over one million people in the UK find themselves unable to work due to serious illness or injury. If that were to happen to you, how would you manage to support yourself? It’s a scenario that we all hope never to face, but ultimately one essential to consider.  To help you do so, here is our essential run down of Living Costs Protection Insurance, what it is, and what could it mean to you.


Living Costs Protection Insurance is a simple, long-term policy that provides a regular replacement income if you find yourself unable to work due to illness or injury. Policies normally pay out a pre-agreed monthly amount until retirement, death, or a return to work. Policies do not pay based on redundancy as a rule.

Living Costs Protection Insurance differs from Critical Illness Cover which pays out a one-off lump sum payment in the event of the insured suffering from one of a list of covered illnesses. It is also different from Short Term Income Protection insurance which pays out a monthly amount (normally smaller than Living Costs Protection payments) for a limited period.

Living costs protection


In the event of serious illness or injury we should all consider what we would do in order to cover our standard and necessary monthly outgoings. Would you be able to survive on the sick pay of your employer, on the state benefits paid out by government, on your own savings, or via the financial support of your spouse or partner? You may find you are in the position to support yourself for a short period of time but if you are unable to work for an extended period of time, it is vital to have a path for survival in place.


A policy provider will consider all aspects of the insured individual before establishing a monthly premium and a monthly payout. Insurers will take into account the health and lifestyle of the individual in addition to the type of job they currently hold. Whether a professional, manager role, or a skilled worker, a specific monthly premium will be established and a framework for ultimate payout agreed. If claimed and approved, payment will only commence after a pre-agreed period has passed (normally between 1 to 12 months) following submission of the claim. The longer the deferral period you choose, the lower your premiums. So, if you think you can support yourself for, say, 12 months pre-assistance, you can choose an extended deferral in order to make lower monthly premium payments.


Having Living Costs Protection Insurance in place will provide the holder with piece of mind. Knowing that in the event of illness or injury, their essential outgoings can still be covered – items like mortgage payments, rental payments, utilities, food etc, mean it would significantly benefit the policy holder and their family, providing a sense of security in an already challenging time.


Planning for your future, whether for the expected or the unexpected, makes sense. Taking some time to consult with your insurance provider will provide you with the best advice on what coverage is most appropriate for you and will ultimately allow peace of mind regardless of what may be around the corner.

Abbey Insurance Brokers

Abbey Insurance shall act as an introducer for Living Cost Protection policies. We will make referrals to a single provider, Freelance Financial Network. Give our team a call on 08000 66 55 44 for more information or request a callback.

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