Insurance for FIRE: Protecting Your Early Retirement Plan
Every revolution needs a defence. FIRE's blind spot is the illness that takes you out of work and freezes the plan. Roughly one in six careers hits it. Yours probably has no cover.
FIRE insurance stack (healthy 30s)
| Cover | Pays out when | Typical monthly cost | Priority for FIRE |
|---|---|---|---|
| Income protection | Too ill to do your job | £30 to £80 | Highest |
| Critical illness | Diagnosis of named condition | £20 to £50 | High if dependants |
| Term life | You die during the term | £15 to £30 | Essential with dependants |
| Emergency fund | 3 to 6 months expenses | 0 (self-funded) | First foundation |
Premium ranges for a healthy non-smoker in their 30s. Roughly 1 in 6 careers hit a 6-month plus disability.
Key takeaways
Don't overlook insurance as a key part of your financial independence plan; it protects your savings from unexpected events.
Income protection insurance ensures you can keep earning if you're unable to work due to illness or injury, maintaining your financial plan.
Critical illness cover provides a lump sum to help cover major medical costs, home adaptations, and debt, offering additional financial security.
The cost of income protection insurance is generally small compared to the potential savings in your financial plan, making it a worthwhile investment.