Tom is a business owner who had built up a successful company, alongside a growing portfolio of pensions and investments. With a young family and financial commitments, his income was central to both his personal and business life. While Tom had focused on building wealth, he had given less thought to what would happen if he were unable to work.
The Challenge
Tom originally met with our adviser, Matt, who worked with him to understand his financial position, including his reliance on income, existing reserves and how long he could realistically support his lifestyle without earnings.
From this, it became clear that a period of ill health or injury could have a significant impact. Without an alternative source of income, both his household finances and wider financial plans could be affected if he were unable to work for an extended period.
The Solution
We recommended an income protection policy designed to provide a regular income if Tom were unable to work due to illness or injury.
The policy was structured to align with his circumstances, including an appropriate deferred period and level of cover, providing a proportion of his income to help meet ongoing commitments if needed. Typically, such policies replace a portion of earnings rather than the full amount, ensuring essential costs can continue to be met while recovery takes place.
The Benefits
Several years later, Tom suffered an accident which resulted in a head injury, leaving him unable to work for a period of time.
He made a claim under the policy, which was successfully accepted. Following the agreed waiting period, the policy began to provide a regular income, helping to cover his household expenditure and maintain financial stability during his recovery.
During this period, we continued to work closely with Tom. This included reviewing his ongoing financial arrangements, including his pension contributions, to ensure they remained appropriate while his income was temporarily reduced and to avoid any risk of over-contribution.
The Outcome
The policy provided Tom with the reassurance that his financial position could be maintained during a difficult time, allowing him to focus on his recovery without the added pressure of lost income.
Tom has since returned to work and continues to work with us on his wider financial planning. He now has a much clearer understanding of the role protection plays alongside building and managing wealth.
