What is income protection insurance?

Income protection insurance replaces a portion of your income — typically 50–70% — if you are unable to work due to illness or injury. Payments continue until you recover, reach retirement age, or the policy term ends.

Is income protection worth it for employed people?

Yes. Most employers only provide sick pay for a limited period — often 3 to 6 months. Once that ends, you'd rely on Statutory Sick Pay of just £116.75 per week. Income protection fills this gap for as long as you need it.

How is income protection different from critical illness cover?

Income protection pays a regular monthly income if you can't work, for any illness or injury. Critical illness cover pays a one-off lump sum if you're diagnosed with a specific condition. Many people benefit from having both.

The Complete Guide to Income Protection Insurance

Income protection is widely described as the most important cover most people don't have. If illness or injury prevents you from working, how long could you manage without your salary?

What does income protection pay?

A policy typically replaces 50–70% of your gross income. Payments continue until you return to work, or until your chosen end date — which can be your retirement age.

The deferred period

Most policies have a waiting period before payments start. This is called the deferred period. Common options are 1, 3, 6, or 12 months. The longer you wait, the lower your premium. Your adviser will help you match the deferred period to your savings and any employer sick pay.

Own occupation vs any occupation

This is the most important distinction in income protection:

Own occupation: You are paid if you cannot do YOUR specific job. This is the gold standard.

Any occupation: You are only paid if you cannot do any job at all. Far harder to claim.

Always aim for own occupation cover. Your adviser will ensure you aren't sold a watered-down policy.

How much does it cost?

Premiums vary significantly based on your age, occupation, health, and the level of cover. A 35-year-old office worker might pay £30–50/month for meaningful cover. A self-employed tradesperson may pay more due to occupation risk.

Why most people underestimate the need

The UK government's Statutory Sick Pay is just £116.75/week. For most people, this covers only a fraction of their monthly outgoings. Without income protection, you are relying on savings — and most households have less than three months of expenses in reserve.

Get advice from a regulated adviser who can search the whole market and find you the right policy for your occupation and budget.