I almost always recommend income protection insurance over critical illness insurance.

This is because Critical Illness insurances have a set list of illnesses, whereas Income Protection pays out on any illness that stops you working.

Now, there is a point that if money were no object you’d have both. But, since it is an object, what we have here is what causes the least financial danger.

If you have an illness that stops you working, but isn’t critical – stress for instance – then money will be a problem and income protection solves that.

If you have a critical illness that doesn’t stop you working, then you’ll wish you had critical illness cover – but it won’t be because you are in financial dire straits, it will be becuase everyone wants a huge chunk of money.

LV= have just issued their claims stats for this year – they do both types of insurance and as with other providers they show that Cancer is the biggest payout by far on Critical Illness policies.

For income protection the top four causes of  claims over the last 12 months were mental disorders (29%), musculoskeletal disorders (20%), circulatory system disorders (11%) and cancers (11%).

The 1st 2 are not covered on critical illness policies, the 3rd is a grey area.

The average age of a female income protection claimant was 44 years, with male claimants two years older on average at 46 years. This is older than the critical illness claims stats issued at the beginning of March by Bright Grey, which had males at 42 – that’s interesting.

For income protection, the average payout period was 8 years. And this is why I recommend it – if you need protection, this is the one that can be the most help.