Be prepared: Your income protection probably won’t cover these 4 life events

You likely know that income protection is an important part of your financial plan. After all, it provides a buffer should you become unable to work due to sickness or injury, allowing you time to recover. 

This amount is usually a tax-free percentage of your salary and can be valuable if you don’t receive adequate sick pay, have limited savings, or are self-employed. 

However, income protection is not a catch-all and there are some conditions and life events it will not provide cover for. In these circumstances, having other contingencies in place could be vital. 

We can help you plan for that. 

But first, let’s explore four common life events that are not covered by income protection.

1. If you are dismissed or made redundant, income protection can’t help

Income protection is designed to cover you against illness or injury. This means that in the event of redundancy or dismissal, you will not receive a payout. 

There are insurance policies available for redundancies, but they can be relatively expensive and may only cover specific circumstances. For example, if you take a voluntary redundancy, you may not be covered.

Always ensure you have thoroughly checked your policy documents.

2. Income protection doesn’t cover taking time off to care for family or loved ones

Voluntary absences are typically not covered by income protection.

So, if you take time off to care for a family member, you would likely need an alternate source of income. This could be through an emergency fund, savings, or support from other family members. 

Select insurers may offer a family carer benefit, but it is not the norm. Here, insurance would pay out if your spouse, civil partner, or child were to suffer from an illness or injury that meant they couldn’t perform their regular activities. 

However, there would likely be a deferment period, your monthly premiums could increase, and not all insurers will offer such extensive benefits. 

3. Elective procedures will not be covered by income protection

Elective procedures, which are planned surgeries or treatments and not medical emergencies, are typically not covered by income protection if you take time off for recovery. 

These might include, but are not limited to:

• Joint replacements
• Cosmetic surgeries
• Cataract removal
• Bariatric surgery
• Tonsillectomies

Even if an elective procedure aims to improve your quality of life, income protection is unlikely to provide cover.

Here, you might consider setting up a specific savings pot ahead of the procedure so that you can take the time you need to fully recover and rest.

4. Income protection doesn’t cover normal pregnancies but may offer support for complications

While having a baby is an event that ultimately requires you to take time off work, this is typically planned time off. So, income protection won’t pay out when you go on leave.

Some policies may provide cover if you develop a medical condition during your pregnancy that stops you from working. This could include complications with your pregnancy or an unrelated illness that prevents you from working until your maternity leave begins. 

As this is a niche area, speaking to a specialist protection adviser is key.

There are ways to prepare for unexpected life events that are not covered by income protection

Insurance can be a boon when you need it, but where it can’t provide full cover, having a contingency plan in place is key. Some options might include:

• Having a robust emergency fund. An emergency fund should ideally cover at least three to six months’ worth of essential living costs. This gives you peace of mind knowing you have a financial buffer should you be unable to work.
• Investigating your workplace benefits. Many employers offer robust sick leave and might pay you in full for a few months or offer a reduced salary for a time.
• Using Statutory Sick Pay (SSP). As of the 2026/27 tax year, you can receive £123.25 per week of SSP or 80% of your normal weekly earnings, whichever is lower.

No two circumstances are alike, and your needs will likely differ from those of your colleagues, friends, and neighbours. However, having multiple contingency plans in place ensures you’re fully covered, no matter what life throws at you.

That’s where we come in. 

In fact, there are several other life events a financial planner can help you prepare for, so check that article out below or keep reading to learn more about how we can help you. 

Read more: 6 key life events a financial planner can help you prepare for

Get in touch

We can work together to ensure you have a safety net in place, designed to support all of life’s biggest events. 

This could include reviewing your current income protection plan to make sure you’re fully covered, working out how much you need in an emergency fund, and assessing workplace benefits. 

We’re here to help, so get in touch today to find out more.

• Marnel Stafford: email Marnel.Stafford@fosterdenovo.com or call 07305 970959
• Ryan Edwards: email Ryan.Edwards@fosterdenovo.com or call 07591 758136 

Alternatively, you can call our office on 0207 469 2800.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.