Why January is ideal for reviewing protection and insurance
January is the perfect time to review your protection needs and insurance. Life changes, policy gaps, and evolving needs could leave you exposed. Discover why a new year check could help keep your finances and plans on track.
The start of a new year brings a sense of reset. Budgets are refreshed, goals are revisited and resolutions are made with the intention of setting the year up well. It’s also a natural moment to review the parts of your finances that often sit quietly in the background — including protection and insurance.
Protection planning isn’t about expecting the worst. It’s about ensuring that, if life takes an unexpected turn, you and your family have the financial support needed. January is a timely opportunity to check whether your existing arrangements still reflect your life today, or even to set up protection for the first time.
The core types of financial protection
While everyone’s circumstances are different, most protection planning focuses on three key areas.
Life insurance provides financial support for your loved ones if you pass away. This might help cover ongoing living costs, repay a mortgage or provide longer-term support for your dependants. The right level of cover depends on factors such as family structure, financial obligations, asset value and current income.
Income protection supports your ability to meet everyday expenses if you’re unable to work due to illness or injury. It typically comes in the form of regular monthly payments, helping to maintain financial stability while you focus on recovery.
Critical illness cover pays out a lump sum if you are diagnosed with a serious condition and are unable to work. The money can be used wherever it’s needed, such as adapting your home to changing needs, covering treatment costs or easing financial pressure by repaying mortgage debt during a difficult period.
Together, these forms of protection help address different types of risk, from short-term disruption to longer-term change.
Common gaps in insurance coverage
Many people assume they’re adequately protected, only to discover gaps when they take a closer look.
One common issue is underestimating how much cover you need. For instance, your policies may have been set up based on an earlier salary or fewer financial commitments. As income rises or family responsibilities grow, your cover may no longer be sufficient.
Another gap can arise from relying solely on employer-provided benefits. Workplace protection can be valuable, but it’s often limited in scope and tied to your employment. Changing jobs or becoming self-employed may significantly alter your level of cover.
Your policy details can also create gaps. Be sure that you fully understand any terms and conditions such as waiting periods, exclusions or benefit limits and review them regularly. Over time, these details can become misaligned with your expectations or needs.
Identifying these gaps usually means stepping back and reviewing protection in the context of your wider financial picture, rather than in isolation.
How life changes affect protection needs
Your insurance needs evolve with your life circumstances.
Starting a new job, receiving a significant pay rise, buying a home or starting a family can all increase your financial responsibilities. Equally, changes such as divorce, children becoming financially independent or paying off a mortgage may reduce the amount of cover you need.
January is a natural checkpoint to ask whether your current arrangements still make sense and meet your needs, and to ensure you understand the specific details of your policies.
Starting the year with confidence
Reviewing your insurance and protection needs may not be the most exciting financial task, but it’s one of the most important. A January review helps ensure your cover reflects your current life, supports your financial stability and aligns with your wider goals.
By taking the time to check policies, identify gaps and account for life changes, you can start the year knowing that your finances are better prepared for uncertainty when it comes.
Important information
This article is for information purposes only. It is not intended as financial advice.
Fees and charges apply.
Protection policies have no cash-in value at any time. If you don't pay your premiums on time your cover will stop, your benefits will end, and you'll get nothing back. If the benefit amount has not been paid out by the end of the selected term, the policy will end and you'll get nothing back.
Any views expressed are our in-house views as at the time of publishing. This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.
