What do 58% of the population have in common?

Insurance.

Insurance comes in many different forms and, whether we realise it or not, most of us interact with it regularly. We insure our cars in case of accidents, our homes against fire or flood, our pets against unexpected vet bills, and even our phones against loss or damage.

Yet despite all of this, many people remain reluctant to insure something arguably far more important than any of the above themselves.

That raises an interesting question: if we are willing to protect so many of our possessions, why do we often hesitate when it comes to protecting our income, health, or the financial security of our families?

One common concern I hear is whether protection policies actually pay out when they are needed.

The short answer is yes they do.

According to ABI data referenced by the FCA, 98% of protection claims were paid in 2024, with insurers paying out a total of £5.3 billion across protection policies. This includes claims relating to life insurance, critical illness cover, and income protection.

Despite this, protection planning is still something many people delay or avoid altogether.

The reality is that most people do not wake up in the morning wanting to buy life insurance. I can think of plenty of things I would rather spend money on. And naturally, many people convince themselves that serious illness, long-term absence from work, or death are things that happen to other people.

“It won’t happen to me.”

That mindset is understandable but it can also be dangerous.

The purpose of insurance is often misunderstood. We do not insure against the expected. We insure to reduce the financial impact of the unexpected.

For many working people, their ability to earn an income is one of their most valuable financial assets. Without it, the plans built around that income can quickly come under pressure.

The FCA has recently highlighted a growing protection gap, where many people who would likely benefit from protection simply do not have adequate cover in place.

For business owners and professionals, that gap can be even more significant because so much often depends on them personally. Their income may support not just a household, but also employees, business commitments, clients, and future plans.

It is worth taking a moment to consider a few uncomfortable but important questions.

If your income stopped tomorrow, would the mortgage continue to be paid? Would the bills still be covered? Would your business continue to function as normal? Would your family’s lifestyle need to change?

Protection planning is not about being pessimistic or expecting the worst to happen.

It is about building resilience.

Good financial planning is not just about growing wealth, investing wisely, or preparing for retirement. It is also about protecting everything you have worked hard to build, so that an unexpected event does not derail years of progress.

Because sometimes the most valuable part of a financial plan is not the growth it creates, but the protection it provides when life does not go according to plan.

Protection plans are subject to terms and conditions. The availability and cost of cover depend on individual circumstances.