The Reality of Losing Income Without Insurance: A Case Study

We don’t often plan for life’s unexpected twists — but what would happen if you suddenly lost your income due to illness or injury? Many people assume “it’ll never happen to me”, or that the state will provide enough support. Unfortunately, the reality can be very different.

Here’s a case study to highlight what life can really look like without the right insurance in place.

Meet Sarah: A Working Parent

Sarah is 42, a mum of two, and works full-time. Like many families, her income is vital to keeping things running smoothly — paying the mortgage, covering bills, and putting food on the table.

One day, Sarah falls seriously ill and is signed off work for several months. She doesn’t have income protection or critical illness cover in place. Instead, she has to rely on Statutory Sick Pay (SSP).

What is Statutory Sick Pay?

In the UK, if you’re employed and too unwell to work, you may be entitled to Statutory Sick Pay. Currently, SSP is:

• £116.75 per week (2024/25 rate)

  
  

• Paid for up to 28 weeks

  
  

• Only available if you earn at least £123 per week before tax

  
  

For Sarah, this means her monthly income drops from around £2,000 take-home pay to less than £470.

The Financial Impact

Sarah’s outgoings look like this:

• Mortgage: £850

  
  

• Utilities and bills: £300

  
  

• Food and household essentials: £450

  
  

• Car finance and transport: £250

  
  

• Other expenses (children’s activities, insurance, etc.): £200

  
  

Total: £2,050 per month

With SSP, Sarah now has less than a quarter of her usual income coming in. Within weeks, she’s struggling to cover essentials, her savings (if any) are quickly depleted, and financial stress begins to pile on top of her illness.

How Insurance Could Have Helped

If Sarah had an income protection policy in place, she could have replaced a significant portion of her lost earnings each month — giving her the breathing space to focus on recovery rather than worrying about paying bills.

Similarly, critical illness cover could have provided a tax-free lump sum to help her clear debts or support her family through a difficult time.

Insurance doesn’t stop bad things from happening — but it ensures they don’t also become a financial crisis.

Why This Matters

Sarah’s story isn’t unusual. Thousands of families in the UK are just one illness or accident away from financial strain. SSP simply isn’t designed to replace a full income — it’s a very minimal safety net.

That’s why having the right insurance in place is so important. It’s not about expecting the worst — it’s about being prepared, so you and your family have peace of mind no matter what life throws at you.

How I Can Help

I provide tailored advice for individuals, families, and businesses to make sure you have the right protection in place. Whether it’s income protection, life cover, or business insurance, I’ll help you find the solutions that suit your needs and budget.

Because while health challenges can’t always be avoided, financial struggles often can.

👉 If you’d like to talk about protecting your income and your family’s future, get in touch for a no-obligation chat.

Approved by The Openwork Partnership on 05/09/2025