Do you spend more on your phone cover than you do on protecting your family?

Only one in 71 adults has an unknown type of insurance that covers the bills if they become too ill to work — far fewer than the number who pay to protect their pets and even their cell phones.

But when tragedy strikes, it is precisely this type of policy that gives the family a financial outlet to adjust. Such was the reality for Gavin Knocker who credits the income protection policy for allowing him to say goodbye to his dying wife.

The devoted husband, 40, lost his beloved wife, Avril, to breast cancer earlier this year. She was only 42 years old. The couple has two sons, Ewen, seven, and Joel, five. Gavin’s claim on his Income Protection Insurance was unusual because it was in his name but he claimed it when his wife was sick.

Support: Gavin Knucker, along with his late wife Avril and their sons Joel and Ewen, were able to claim an Income Protection Policy

Support: Gavin Knucker, along with his late wife Avril and their sons Joel and Ewen, were able to claim an Income Protection Policy

Avril was diagnosed with breast cancer in May last year. She underwent a successful mastectomy and was told that the cancer had been detected. With the episode proving to be a wake-up call, Avril encourages Gavin to purchase income protection that will protect the family’s finances if he needs time off work for major health reasons.

Gavin works as a truck driver and lives with his children in Belfast. “Avril was financially savvy and was nagging me to buy income protection before she got sick, but I forgot to do it,” he says. After surgery she reminded me.

He continued to use the LifeSearch advice service and bought insurance with British Friendly for £16 a month. A few weeks later, in a cruel twist of fate, Avril was told that the cancer had spread to her lungs and she was at last.

Devastated, Avril sank into a depression while Gavin cut his work week by three days.

“She went through hell and attempted suicide,” he says.

The burden on the family was overwhelming and a doctor signed Gavin off work with stress. He called British Friendly, and never for one minute thought his insurance would cover his circumstances. But surprisingly, she did – because pressure was built into the policy and wasn’t a pre-existing condition.

“We were given access to my wife’s medical records in a British-friendly way,” says Gavin, “and we could see we bought the policy in good faith when we thought she had it all in the clear, and we were happy to make plans for the future.”

A successful claim meant that the family received £1,200 a month and Gavin did not have to worry about going to work while his family was taken care of. “I can’t stress enough how much politics has helped us,” says Gavin. “It gave me time to say goodbye to Avril and to prepare the boys.”

Gavin went back to work this spring, which means his policy stopped paying out a month early anyway — payments were limited to one year.

But two days later, he got a call from a British friend saying he was also owed £3,500. “I now encourage co-workers to look into this type of insurance,” says Gavin.

People live on the edge of a financial abyss

Life and critical illness insurance policies are more popular than income protection. Life insurance pays upon death while critical illness plans pay a lump sum upon diagnosis of certain diseases such as cancer or a heart attack.

But workers generally lack financial protection with no cover at all for more than half of adults.

This is caused by a lack of awareness, an overestimation of the extent to which the employer or state is offering, concerns about cost and a belief that any future claims will not be met.

London financial advisor Drewberry recently asked 3,000 workers to take out protection insurance. Respondents underestimated the chance of dying early and overestimated the cost of coverage.

They also assumed that less than 38 percent of life insurance claims were accepted, when the correct figure is closer to 96 percent.

‘Although there is a large percentage of the population living on a financial knife edge, the public at large is unfortunately not adequately prepared to deal with the financial consequences of long-term illness or the unexpected death of the main breadwinner,’ says Tom Conner, Principal at Drewberry.

Some policies offer help even if you don’t ask for it

Anyone who buys protection insurance should look beyond the price. Many policies offer services that are available for use regardless of whether or not a claim is made.

For example, Royal London policies sold through advisors come with an add-on called Helping Hand. It provides access to counseling and physiotherapy and is available to the family as well as the client. Scottish protection policies provide widows with access to Red Arc, an independent advisory service provided by nurses.

The insurance company AIG offers the best doctors, allowing clients to get a second opinion from a doctor who specializes in their chosen field.

More serious illness policies cover children, too. According to Royal London, a child claim is the fifth most likely cause of a payout – after cancer, heart attack, stroke and multiple sclerosis.

Jennifer Gilchrist, Protection Insurance Specialist at Royal London, says: “There has been an increasing number of pediatric illnesses being added to the list of those covered by critical illness policies. Really started.

“The critical illness policy will pay a lump sum so that families can take time off with their child in the hospital.”

Protection insurance advisors such as LifeSearch, Drewberry and Highclere Financial Services can help you find a premium-priced policy with important extras.

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