Income protection insurance

Income protection insurance is a type of cover that provides a regular, tax-free income if you are unable to work due to illness or injury. Unlike critical illness insurance, which pays out a lump sum for specific conditions, income protection continues to pay a percentage of your salary until you recover, retire, or reach the end of the policy term.

That financial safety net can help you cover essential bills, mortgage payments and day-to-day living costs while you focus on recovery, rather than drawing down savings or taking on debt.

See what your protection needs to cover

Our free life insurance calculator sizes the debts, income and dependants your protection needs to support — a useful starting point before an adviser call.

If you were suddenly unable to work, income protection could make a critical difference. The key benefits are:

• Replace lost earnings — receive up to 60–70% of your gross income to cover expenses while you are unable to work.
• Maintain your lifestyle — continue paying your mortgage, rent and bills without financial strain.
• Long-term support — policies can pay out until you recover, return to work, or retire.
• Peace of mind — knowing your financial obligations are covered allows you to focus on your health.

Without adequate protection, a sudden loss of income could lead to debt or significant lifestyle changes. Income protection ensures you and your family are safeguarded against the unexpected.

Income protection insurance is particularly valuable for:

• Employees with limited sick pay — if your employer only offers statutory sick pay, this cover prevents a sudden drop in income.
• Self-employed people — without access to employer benefits, income protection provides vital financial security.
• Homeowners and renters — keep up with mortgage or rent payments even if you cannot work.
• Parents and guardians — ensure your family’s living costs are covered while you recover.

Anyone who relies on their income to support their lifestyle should consider income protection as part of their wider financial plan, alongside life cover and critical illness cover.

1. Choose your policy

Decide on the level of cover, the payout period, and the waiting period — the deferred time before payments begin, often aligned with how long your employer sick pay lasts.

2. Pay monthly premiums

Premiums vary based on factors such as age, health, occupation and the amount of cover you choose.

3. Make a claim

If you are unable to work due to illness or injury, you claim against the policy and provide the medical evidence your insurer requires.

4. Receive regular payments

You then receive a monthly income until you recover, retire, or the policy term ends — whichever comes first.

The cost of income protection insurance depends on:

• Your age — premiums tend to be lower when you are younger.
• Your health — pre-existing conditions may affect the cost of cover.
• Your occupation — jobs with a higher risk of illness or injury may carry higher premiums.
• Your waiting period — choosing a longer deferred period, such as six months, can reduce premiums considerably.

While the cost varies, income protection is often more affordable than people expect, and the benefit far outweighs the cost if illness or injury strikes.

Choosing income protection can be complex — the deferred period, the definition of incapacity and the claims record of the insurer all matter more than the headline price. An adviser can help you:

• Assess your needs — understand how much cover you need and the right deferred period for your situation.
• Find affordable cover — compare policies from leading providers to secure cost-effective protection.
• Tailor a policy — make sure the cover aligns with your income, lifestyle and financial obligations.
• Check it fits the wider plan — coordinate income protection with any life, critical illness and employer cover you already hold.