You may assume you’ll never need it, but if you experience redundancy or illness, you may become eligible for universal credit. The government is slowly rolling out the new single payment designed to replace six existing state benefits.

Universal credit is expected to be adopted nationwide by 2023. However, there has been controversy about the changes, and delays to implementation.

Universal credit replaces the following benefits: child tax credit; housing benefit; income support; income-based jobseeker’s allowance (JSA); income-related employment and support allowance (ESA); and working tax credit.

It’s important to remember these benefits only provide a basic standard of living.

Greater protection

The good news is that insurance can bridge the gaps in your financial security. A range of insurance protection products can pay out if you lose your job, become too ill to work or die.

Life insurance typically pays out a lump sum if the policyholder dies before a set date. This is often a cost-effective option, because premiums are low as the chances of claiming are relatively low. However, should the worst
happen, the lump sum can help ease financial worries for families at a difficult time.

Critical illness insurance pays out a fixed lump sum if you are diagnosed with a specified serious illness, including most types of cancer, stroke and heart disease.

Income protection insurance pays a monthly amount – usually a fixed portion of your regular earnings – if you cannot work because of illhealth. This normally only pays out once you have stopped work for a certain period of time.

All these policies can be purchased by individuals, but some employers also provide cover, so check what is available. The government recently confirmed that any payment from these insurance policies won’t affect your entitlement to state benefits such as universal credit. If you are concerned about potential consequences for your income should you have health concerns, please get in touch.

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