Protection policy holders are being urged to review their cover every year or so after a survey by insurer Scottish Widows revealed that one in three never have.
Protection insurance pays out if you become unwell and cannot work. One in four people in the UK have some kind of policy, but millions forget about them or don’t check they still cover their needs. If you haven’t checked your policy for some time you may find it no longer pays out enough to cover your outgoings should you claim.
But sometimes reviewing policies can lead to nice surprises. Sarah Mitchell, 59, had been paying towards a protection policy for years.
Check your policy: Protection policy holders are being urged to review their cover every year
She says: ‘I must have taken it out when I took out a mortgage. It appeared as £10 a month coming out of my bank and going to Scottish Widows, but I forgot what it was and never got round to checking.’
When Sarah was diagnosed with liver disease in 2017 she was unable to work and got into debt.
‘I had no idea I had a protection policy by this point,’ says the retired teacher from the Isle of Wight.
‘But by chance I got a letter from Scottish Widows to say it was reducing my premiums. So I called and found I still had a policy.’
The insurer paid out £21,000 – enough to help Sarah clear her debts and get her finances back into shape.
Rose St Louis, protection director at Scottish Widows, says: ‘Some people don’t review policies regularly – or when circumstances change – to make sure they are still right for their needs.
‘No one likes to think about the worst case scenario, but taking some small steps can provide valuable reassurance and protection.’