Staying Above The Poverty Line With Income Protection Insurance
Like many countries, the United Kingdom has designated official limits for the income that it considers necessary to have a reasonably comfortable and healthy lifestyle. Anyone whose income falls below these limits is considered as living below the poverty line.
This article looks at what the current UK poverty line actually is, and what families can do to prevent themselves falling below this line in these incredibly unpredictable and unstable economic times.
By the latest measure, the poverty line for a British couple with no children is £248 a week. For a couple with one child this goes up to £297 a week; two children is £347 and 3 children is £396. The government’s experts have deemed that everyone should be earning more than these figures, because they are not conducive to a decent standard of living.
Unfortunately, since the 2008 recession more and more families have found themselves falling under the poverty line, as widespread redundancies in the public and private sectors have coincided with major cuts to benefit entitlements, meaning many have faced severe cuts to their income.
At the very least, anyone who is out of work but looking for a job is entitled to a payment of £67.50 a week in unemployment benefits, or if they are unable to work for medical reasons then they are able to pick up a similar weekly amount under the Employment Support Allowance. However, if a couple is depending on this source of income to support a family and cover rent or a mortgage, they are likely to find this money will not go very far at all, and in fact they will probably find themselves under the government criteria for being ‘in poverty’.
This troubling scenario could befall any family if the main breadwinner losing their job or is forced to quit working because of a serious medical condition. Without savings, a family such as this would be forced to rely on woefully inadequate state benefits, putting them quickly on the wrong side of the official poverty line.
To avoid this unwelcome situation occurring, many families have been persuaded to take out income protection insurance policies. This acts as a safety net, so that if the main source of income is cut off because of redundancy or illness, the policy kicks in and starts providing payments of several hundred pounds (depending upon the type of policy selected). These insurance payments, coupled with the money received from state benefits, will mean that a family with an income protection policy will never need to worry about falling below the poverty line.
With the financial burden significantly eased by the insurance policy, the main breadwinner can devote all their energy towards either looking for another job or recovering from their illness. For this reason, unemployment insurance makes sense on a personal as well as a financial level. With policies asking for monthly payments as little as Â£20, it is an easy and cost-effective way to safeguard the future of a household and family.
Source by Dennis Haggerty