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Protection — income cover, life insurance, wills and LPAs

The plan for when things go wrong — income protection, life cover, a will and a lasting power of attorney — and the order to sort them in.

The missing half of the plan

Every other guide on this site assumes a future in which you keep earning, stay healthy, and remain able to sign your own name. Most of the time that’s exactly what happens. But a financial plan that only works when nothing goes wrong isn’t a plan — it’s a forecast. The emergency fund guide argues that a cash buffer is what lets you invest aggressively everywhere else; this guide is the same argument carried to its conclusion. The emergency fund covers the boiler and a few months between jobs. It does not cover the two genuinely ruinous scenarios: losing your income for years, and dying or losing capacity while people depend on you.

None of this is fun to think about, which is precisely why the people who most need it — thirties and forties, mortgage, young children, everything resting on one or two salaries — most reliably haven’t done it. The whole list below costs a few hundred pounds and a few evenings, and most of it you’ll never think about again.

Start with what you already have

Before buying anything, find out what’s already in place — it changes what you need to buy.

Income protection — the cover almost nobody has

If you’re under 50, you are several times more likely to be off work sick for months or years before retirement than to die before it. Yet life insurance outsells income protection many times over, mostly because life cover is what gets cross-sold with mortgages.

Income protection pays a monthly, tax-free income — typically 50–65% of gross salary — if illness or injury stops you working, and keeps paying until you recover, return to work, or hit the policy’s end age (set this at your expected retirement age). The variables that matter:

Cost scales with age, health, smoking and occupation class — a healthy thirty-something office worker might pay £20–£40 a month for meaningful cover to age 67. The self-employed, who get no sick pay at all, need this most and buy it least. Budget option: a shorter payment period (each claim pays for a maximum of 2 years) covers the most common absences at maybe half the premium — less good than full-term cover, far better than nothing.

Life cover — cheap, boring, and only if someone depends on you

No dependants and no joint mortgage? You may not need life insurance at all — skip to the will. For everyone else, the default answer is term insurance: it pays out only if you die within the term, which is why it’s cheap — for a healthy non-smoker in their thirties, hundreds of thousands of pounds of cover typically costs £10–£30 a month.

A common-sense sizing check: mortgage balance, plus roughly 10× the income you’re replacing if children are young, minus existing death-in-service. Couples should price two single policies rather than one joint policy — often barely more expensive, and it pays out twice if the worst happens twice.

Write it in trust. Ask the insurer for the (free) trust form when you take the policy out. In trust, the payout goes straight to your beneficiaries in weeks, outside your estate — rather than sitting in probate for months and potentially swelling an inheritance-tax bill. Almost nobody is told this; almost everybody should do it. (Pensions have their own version of this problem from April 2027 — see the pensions and inheritance tax guide.)

Critical illness cover pays a lump sum on diagnosis of specified serious conditions (cancer, heart attack, stroke and a long list of definitions that vary by insurer). It’s substantially more expensive than life cover and the definitions are where claims get contested. If the budget only stretches to one thing, income protection covers more scenarios for the money; critical illness is the “nice to have on top”, not the foundation — despite usually being sold the other way round.

What to skip: accidental-death policies (cover so narrow it rarely pays), mortgage payment protection insurance sold with the loan, over-50s plans that can pay out less than you put in, and the free “£10,000 of parent cover” marketing hooks — none of these is a substitute for the real products above. Buy through a whole-of-market broker or comparison, disclose your health honestly (non-disclosure is the main reason claims fail), and never cancel an old policy before the replacement is live.

A will — or the state writes one for you

Die without a will and the intestacy rules decide everything. In England and Wales: a spouse or civil partner gets your personal possessions, the first £322,000 and half of the rest — with the other half going to your children, even if that forces the family home to be sold. An unmarried partner gets nothing, however long you’ve been together and whatever you’d have wanted. Scotland and Northern Ireland have different rules, but the same principle: no will, no say.

A will also does the job no insurance can: it names guardians for your children. Without it, the courts decide who raises them.

The practicalities are easier than the procrastination suggests:

Lasting power of attorney — the one people regret not having

Death isn’t the only way to lose control of your affairs — a stroke, an accident or dementia can leave you alive but without mental capacity. Without paperwork in place, nobody, including your spouse, has automatic authority over your accounts: joint accounts can be frozen, and your family’s only route is applying to the Court of Protection for a deputyship — a process that takes months, costs thousands, and puts a court, not you, in charge of choosing who acts for you.

The fix is a lasting power of attorney (LPA), made while you’re healthy. There are two types, and you want both:

In England and Wales you can do the whole thing yourself on the government’s online service; registration costs £82 per LPA (so £164 per person for both types, with reductions on low incomes). Scotland and Northern Ireland have their own equivalents (a power of attorney registered with the OPG Scotland; an enduring power of attorney in NI). Choose attorneys you trust completely, name a replacement in case your first choice can’t act, and register now rather than “when needed” — registration takes weeks and an unregistered LPA is just paper. For a couple in their thirties this feels absurdly premature; that is exactly the time to do it, because you can’t make one after the point at which you need it.

The order to do it in

  1. Free and instant: pension expression-of-wish and death-in-service nomination forms.
  2. This month: a will each, with guardians named if you have children.
  3. This quarter: income protection sized around your sick pay and emergency fund; life cover (in trust) if anyone depends on your income.
  4. This year: both LPAs each, registered.

Then put a recurring reminder in your calendar to re-check the lot at every big life event — marriage, children, house move, new job — and get back to the cheerful business of compounding.

The one-line summary

Protect the income first, then the dependants, then the paperwork: income protection matched to your sick pay, term life cover written in trust if anyone relies on you, a will that names guardians, and both LPAs registered while you’re well — the few hundred pounds that makes the rest of the plan crash-proof.

Last reviewed: August 2026.