There are many events that can spell financial disaster for a family. The first instinct is to make contingency plans should the breadwinner die so that some form of income can continue. But what if it's the homemaker who was to die? In that situation the breadwinner has two functions to fulfil and this may not be a practical proposition.

Also, we neglect the consequences of serious illness. Someone in their 30's or 40's is many times more likely to suffer a critical illness like cancer, a heart attack or a stroke than to die. Ironically, the financial consequences of such a situation can be harsher than if death had occurred. The individual may need specialist medical care and home alterations may need to be made. None of the usual expenses, including the mortgage, disappear. Though greatly under-bought and under-sold, Critical Illness policies have been on the market for many years and competitive pressure in the insurance industry has driven premiums down.

Similarly, a period of prolonged illness may lead to lengthy absence from work. Many employers take an enlightened approach to staff sickness but this is unlikely to extend to paying a salary indefinitely. In the absence of salary, this may leave the individual with no income other than Single Person's Invalidity Benefit. Income protection policies are designed to pay a replacement income once salary has ceased and can continue providing this benefit until retirement.

Clearly, many of these issues don't only affect families but are just as relevant to single people with the usual collection of financial responsibilities.

Note:  Protection products may not be regulated by the FSA

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