It is something we really don’t want to think about, particularly when we are young and fit. But realistically, our health and our ability to earn income can be snatched away without warning; but the bills will still keep piling up. We all know of someone who it actually happened to. And whilst we often tend to fear the worst, the reality is that serious illness or injury is often only temporary. Once health returns, the injury or illness will become just a bad memory. But if you are not working for several months the financial impact can last for years and you might never recover from it.

Whilst it can’t change the fact that a serious accident or illness happened, the good news is that you can protect against the financial impact of these events. You can ensure that important things in your life change as little as possible, such as where you live, where the kids go to school and your ongoing lifestyle after recovery.

No matter what your situation in life, income protection should be considered and it need not cost the earth.

Single with no dependants
It affects you too. Can you really rely on your parents or family to pick up the financial pieces? Centrelink payments are pretty meagre each fortnight and your mortgage still needs to be paid. Consider protecting your income and having access to funds in case of unexpected medical expenses caused by a serious trauma event.

Young families
There never seems to be enough time. There are constant pressures on money including the mortgage, school fees and weekly housekeeping. If your income suddenly stopped, even just for a few months, would you be able to survive on Centrelink payments? Would an extended period of illness require you to sell your house and how long after you return to work would it take to get things back on track, if ever? Determine some priorities. Consider what things are the most important for you and how you can protect them.

Older families
Your time commitments may be changing and you are not spending as much time running around after the kids as you used to. You are probably considering what type of lifestyle you wish to maintain in the next phase of your life. Health issues are probably more of a concern than they were years ago. Now the tables may have turned and you might be considering whether your family will be able to take care of you if required. Maybe selling your home is an option if finances suddenly become tight. Consider a protection strategy that ensures that your income and family home are secure and that your plans for comfortable retirement can remain on track.

Older couples
The children are off your hands. Maybe you just need to consider if your plans for a comfortable retirement are still achievable. Obviously, the cost of insurance increases with age. It might simply be that now is the right time to discuss lifestyle protection with your children.

The natural reaction is to assume that insurance is too expensive, considering all the other more immediate costs that need to be paid. But like all other insurances, when you call on it you are so grateful that you had it.

For many people the first stage might simply involve looking at your current situation and evaluating what the future might look like. Three simple steps might help you determine whether income protection is worth considering for your situation in life.

• Identify what things you value the most so you can protect them
• Quantify the items that you would like to protect
• Determine if there is a gap that needs to be protected.