The policy you meant to buy does not pay the claim.

If you have a mortgage, the lender almost always requires buildings insurance to be in force. That policy covers the structure: walls, roof, fitted kitchen in the usual wording. It does not automatically cover the sofa, the laptop, or a tenant's belongings. A renter usually cannot buy buildings cover on a home they do not own, and still needs to think about contents. A homeowner who lets the buildings policy lapse because the direct debit failed has a mortgage condition problem as well as a fire problem. Check the renewal date the way you check the MOT.

Sick pay is shorter than people remember

Contractual sick pay, if you have it, is whatever the contract says, often a few weeks or months at full pay and then a drop. Statutory Sick Pay is a set weekly amount for a limited period, far below most salaries, and it has eligibility rules. GOV.UK publishes the current rate. We are not printing a pound figure here because it is exactly the sort of number that goes stale between budgets and leaves a blog looking precise and wrong. The planning point survives the rate change: a three-month cash buffer does not replace a year of lost earnings. It buys time. Income protection insurance, sometimes called permanent health insurance, is the product designed to pay a proportion of income after a deferred period if illness or injury stops you working, subject to exclusions, occupation definitions, and the claim being accepted.

Three products, three events

• Life insurance pays a lump sum or an income if the person insured dies during the term. It does not pay because you are ill and still alive.
• Critical illness cover pays a lump sum if you are diagnosed with a condition named in the policy, at the severity the policy defines. Many illnesses are not on the list. Reading the list is the product.
• Income protection is about salary replacement while you cannot work, after a waiting period you chose, up to a cap the insurer sets. A cheaper premium often means a longer wait or a narrower definition of incapacity.

Employer life cover, sometimes called death in service, is a benefit of the job. It usually ends when the job ends. Treating it as a family plan that survives a redundancy is a mistake. So is buying a duplicate personal policy you do not need while the cash buffer is empty. Order, again: know what the employer already provides, know the gap, then decide. An FCA-authorised protection adviser or a comparison that you read properly can do that job. A banner advert cannot.

Price is the wrong first sort

Households sort insurance by the monthly direct debit because that is the number on the screen. The numbers that change a claim are the excess, the exclusions, the deferred period, whether cover is own-occupation or any-occupation, and whether a buildings policy has accidentally been set to a sum insured that would not rebuild the house. Underinsurance on buildings and contents is a quiet UK mistake: the insurer can reduce the payout, not merely charge you the missing premium. A rebuild cost is not the estate-agent price and it is not the mortgage balance.

What FSCS does and does not do here

The £120,000 figure on our cash guide is a deposit limit. Insurance has a different FSCS protection regime, generally aimed at the situation where an authorised insurer fails, with its own percentages and caps. It is not a reason to buy a policy, and it is not a substitute for the insurer paying a valid claim while it is still trading. If you want the boundary, read the FSCS insurance pages rather than a social post that reused the savings number.

A short household check

1. Is buildings insurance in force if a lender requires it, and is the renewal date in the next 60 days?
2. Do contents matter enough that replacing them in cash would sink the buffer?
3. How many weeks of contractual sick pay are actually written down?
4. Does anyone depend on your income, and does any life cover survive a job change?
5. If you already pay for a policy, can you explain in one sentence what event it pays on?

If question five is no, the mistake is not that you lack a product. It is that you are paying for a sentence you cannot read back.

These notes are general information for readers in the United Kingdom. They are not a personal recommendation, not a forecast, and not an instruction to buy, sell, borrow, or opt out of anything. Operandultra is not authorised by the Financial Conduct Authority. Figures below are written for the 2026/27 tax year unless a later commencement date is stated. Confirm them on GOV.UK, with MoneyHelper, or with an FCA-authorised adviser before you act.