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Why you can’t always rely on State benefits.

Many people believe they may be entitled to receive some financial help from their employer or through the State benefit system should something happen to them. However, in reality you may not even receive enough to maintain your current lifestyle.

The State benefit available may be only a small proportion of your current income and your individual circumstances will affect how much you get. Most policies put a limit on the amount you can claim. Typically, the amount paid by the policy plus money from any other insurance that pays out when you are ill plus any sick pay or state benefits must not come to more than three quarters of your before-tax earnings over the past 12 months.

State Employment and Support Allowance is a Government benefit which you may be entitled to if you are unable to work because of sickness or accident. As this is not guaranteed to be paid to you when you are unable to work, you can choose to insure against not being entitled to receive it, if you are unable to work. This means you can choose to add the equivalent of the Basic Amount and Work Related Activity Components of the State Employment and Support Allowance to amount of cover you apply for. This could then bridge the gap in income shortfall if you find yourself unable to work due to illness.

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