Income Protection Insurance. Most people insure: • their car • their phone • their home …but many people never think about protecting their income.

Most people insure their car, their phone, and their home, but many never consider protecting their income. Yet, your income is typically the source that pays for everything else. If you became ill or unable to work for an extended period, how would your bills still get paid? That’s where income protection can help. 

What is income protection? Income protection is a form of monthly income insurance that can provide you with a regular payment if you're unable to work due to illness, injury, or accidents. It's designed to help you maintain your everyday living costs while you recover. If you are signed off work for medical reasons, this policy can pay a monthly benefit until you return to your job.

What can it help cover? People often use income protection payments towards essential expenses such as mortgage or rent, household bills, food and shopping, loans and credit cards, childcare, and other general living expenses. In simple terms, it helps replace part of your lost income. 

Did You Know? In the last three months of 2025, an estimated 2.8 million people were not working due to long-term sickness. 

How much does it pay? Most insurers allow you to insure a percentage of your income, typically around 55% to 70% of your earnings. The exact amount depends on factors like your income, employment type, and insurer criteria. 

When do payments start? Income protection policies can be set up without a deferred period, which means you could claim immediately. Policies without a deferred period are generally more expensive but are available. The deferred period can be arranged for various durations such as 4 weeks, 8 weeks, 13 weeks, 26 weeks, or longer. People often choose a deferred period based on their employer sick pay, savings, and how long they could manage financially without income. 

For instance, an employee might have a sick pay provision from their employer where they receive full pay for 3 months and half pay for an additional 3 months. An income protection policy can be set up for this person so that during months 4, 5, and 6, they can top up their income from the half salary they receive from their employer. After 6 months, when the employer's sick pay ends, the full cover amount will kick in. 

How long does it pay for? Policies can vary; some pay for a defined short period (for example, 1 to 2 years), while others provide long-term cover that can continue until you return to work or reach retirement age. 

Is income protection the same as life insurance? No. Life insurance pays out upon your death, whereas income protection provides a monthly income if you're unable to work due to illness or injury. Many people opt for both income protection and life insurance to ensure their family maintains financial stability. 

Is income protection the same as critical illness cover? No. Critical illness cover usually pays a one-off lump sum if you are diagnosed with a specified serious illness, while income protection is designed to provide ongoing monthly payments while you are unable to work. 

Who is income protection for? Income protection can be especially crucial for homeowners, self-employed workers, families, contractors, individuals without generous sick pay, and anyone who relies on their income to pay monthly bills. 

Why do people take out income protection? It is a sad reality that your outgoings would not stop if your income did. Most people do not anticipate becoming seriously ill or unable to work; illness and injury often come as a surprise. When they do happen, the impact is profound—not only from a health perspective but also from a financial standpoint. 

Many households would face significant financial strain if their income stopped for several months, but knowing there would still be money coming into the household if you cannot work would provide immense relief for you and your loved ones. 

Did You Know? 39% of people in the UK have £1,000 or less in savings, and 25% have £200 or less. Income protection can help provide financial stability insurance, peace of mind, and protection for your home and lifestyle. 

How much does it cost? The cost of income protection depends on your age, health, occupation, smoking status, level of cover, and deferred period. Many are surprised to find that cover can often cost less than expected. 

How can a protection adviser help? A protection adviser can explain the options simply, compare insurers, recommend suitable cover levels, clarify policy differences, and assist with the application process. Most importantly, an adviser can ensure the cover fits your personal circumstances and budget. 

In simple terms, income protection is designed to help replace part of your income if illness or injury stops you from working. For many, it can provide valuable financial support and peace of mind during difficult times.