Income Protection Insurance

Each year nearly a million people in the UK find themselves unable to work due to a serious illness or injury. If you couldn’t work due to a serious illness, how would you manage? Could you survive on savings, or on sick pay from work? If not, you’ll need some other way to keep paying the bills – and you might want to consider income protection insurance. Read on for more information or visit the FAQ section below.

What is It?

 

Income protection insurance is a policy that pays out if you're unable to work because of injury or illness. It pays out regularly to replace a portion of your income. It will help you pay your household bills that you can no longer cover, by making sure you have a regular income over the long term.


How Does It Work?

 

You will receive monthly, tax-free payments after you have been unable to work due to illness or injury for a set period of time, known as the deferred period. This is often 3 or 6 months but be as short as a few days or as long as 12 months.

Patient with leg in plaster and crutches unable to work

Cover lasts for the period you choose - for example, until your mortgage is paid or your pension is due to start. Payments stop when you are able to return to work, retire, or the policy ends. Short-term income protection policies, which last for one or two years, are also available at a lower cost.

Can You Claim More Than Once?

 

Yes. You can make as many claims as you need during the policy term.

 

Why Might I Need It?

 

State benefits for those unable to work are low. If you would struggle to cope on an income of less than £120 per week*, you should consider Income Protection insurance. Carry on reading to see some Frequently Asked Questions about Income Protection Insurance, contact us to request a full quote or get a Quick Quote online using the button below.


* Statutory Sick Pay level £116.75 at 04/02/2025.

INCOME PROTECTION INSURANCE FAQ

Here are some common questions asked about Income Protection Insurance. Got a question that is not covered? Send it to us and we will answer it for you and maybe add it to the list below.



  • Won't I get support from the government?

    If you are employed, you will get a very small amount of Statutory Sick Pay in the UK. It is currently £99.35 per week (in 2022) for up to 28 weeks. If someone earned £611 per week (this is the current average wage for UK earners) then they could be facing almost an 85% drop in income if they are relying on statutory sick pay alone. 


    Those who are self-employed or for those who do not earn on average at least £123 per week, are not eligible for statutory sick pay and will need to claim Universal Credit.


    If you can’t work because of illness or injury,  arranging Income Protection insurance could give you a monthly income to help you and your family cover the essentials.


  • I’ve already got critical illness cover, do I really need Income Protection cover too?

    Whilst critical illness cover is important and does pay out for many illnesses, there are some conditions that wouldn’t meet the definition of a critical illness. 


    For example, again in 2021, musculoskeletal problems and mental health conditions cost workers more than 41 million of their workdays. Whilst critical illness cover may have paid out to some of these claimants, income protection policyholders would have been more likely to be eligible for a payment. 


    One of the many benefits of an income protection policy is that, as long as the illness or injury keeps the client off work and the deferred period has been met, the client doesn’t have to be diagnosed with a specified illness to receive a payment this is unlike a critical illness policy. 


  • Will the Insurers actually pay out when I make a claim?

    The vast majority of claims are paid. For example, one of the leading insurers in the UK paid 86% of all it's income protection claims to 27,892 people (according to the Association of British Insurers) and this totaled over £734,000,000. This is an average of around £23,380 being paid to each claimant. This figure includes new claims as well as those already in payment. 


  • Do I still need Income Protection if I don’t have dependents?

    Yes, Income protection is about protecting yourself and your income. We all have to pay for housing, bills and costs of maintaining a comfortable lifestyle. The average household in the UK spends around £587.90 per week! Although we may be able to cut back on certain things, it is not always realistic to expect to find significant savings. 


    Without income, we might have to consider significant lifestyle changes such as moving back in with parents/family, downsizing, giving up cars/other vehicles as well as having to cut down on other things we enjoy such as takeaways or TV subscriptions. 


  • Isn't Income Protection cover expensive?

    Income protection cover can seem a bit more expensve than some other covers. This is largely because you are more likely to claim on an income protection policy than life insurance, for example.However, in return, it will enable a person to continue to enjoy the lifestyle they are used to, despite not being able to work through illness or injury. Without income protection cover you could be financially vulnerable.


    There are also ways to make income protection policies more affordable. You could have a longer deferred period before the payments begin (for example, you might get sick pay from your employer for the first 6 months meaning you could have a deferred period of 6 months which would make your plan more affordable.) You could also take the policy out on a limited term. We can help you to find a level and breadth of cover which will be affordable for your budget.

  • I am self-employed. Can I have Income Protection Insurance?

    Yes. Whether you are working as an employee, self-employed or running your own Limited Company, you can apply for Income Protection Cover.

  • How likely is it that I will need to claim on my Income Protection policy?

    It is only possible to answer this in general terms because each person's health and circumstances are different and it depends on the terms of the policy you take out. 


    According to leading insurer LV=, a 35 year old male has a 31% chance of being unable to work, due to illness, for 2 months or more on at least one occasion before retiring at age 67. For a 35 year old female the risk is 39%. (Assumes non-smoker. The risk for a smoker is greater. Statistics correct at 21/12/2022)

Note: If premium payments are not maintained, the benefits of the plan will be put at risk. If premium payments cease altogether, the benefits of the plan will cease. The cover may be less than you need if you do not review it regularly.