income protection

Most people insure:

• their car
• their phone
• their home

…but many people never think about protecting their income.

Yet your income is usually the thing that pays for everything else.

If you became ill or were unable to work for a long period of time, how would the bills still get paid?

That’s where income protection can help.

What is income protection?

Income protection is a type of insurance that can pay you a monthly income if you are unable to work because of:

• illness
• injury
• accidents

It is designed to help you continue paying for everyday living costs while you recover.

If you are signed off work for a medical reason, the policy can pay a monthly benefit until you return to work.

What can it help cover?

People often use income protection payments towards:

• mortgage or rent
• household bills
• food and shopping
• loans and credit cards
• childcare
• general living expenses

In simple terms, it helps replace part of your lost income.

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

How much does it pay?

Most insurers allow you to insure a percentage of your income, commonly around 55% to 70% of your earnings.

The exact amount depends on:

• your income
• employment type
• insurer criteria

When do payments start?

Income protection policies can be set up without a deferred period – which is like a waiting period – so you can set up to claim immediately. Policies with no deferred period are more expensive than policies with deferred periods but they are available.

The deferred period can be arranged for:

• 4 weeks
• 8 weeks
• 13 weeks
• 26 weeks
• or longer

People often choose a deferred period based on:

• employer sick pay
• savings
• how long they could manage financially without income

So, for example, an employee might have a sick pay provision from their employer where they get full pay for 3 months and then half pay for a further 3 months. An income protection policy can be set up for this person so for months 4, 5 and 6 they top up their income from the half salary they receive off the employer and then after 6 months when the sick pay is removed completely by the employer then the full cover amount kicks in.

How long does it pay for?

Policies can vary.

Some pay for a defined short period (for example 1–2 years)

Others provide long-term cover and can continue paying until:

• you return to work
• or retirement age

Is income protection the same as life insurance?

No. Life insurance pays out if you die.

Income protection pays a monthly income if you are unable to work due to illness or injury.

Many people choose to have both income protection and life insurance to ensure their family is financially as resilient as possible.

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. 

Income protection is designed to provide ongoing monthly payments while you are unable to work.

Who is income protection for?

Income protection can be particularly important for:

• homeowners
• self-employed workers
• families
• contractors
• people without generous sick pay
• anyone who relies on their income to pay monthly bills

Why do people take out income protection?

It is a sad fact of life that your outgoings would not stop if your income did. 

Most people do not expect to become seriously ill or unable to work. For most people illness and injury comes as a surprise – but it when it happens the impact is dramatic. Not just for the obvious health circumstances but the enormous financial repercussions.

Many households would struggle financially if income stopped for several months but knowing there would still be money coming into the household if you cannot work would be a huge 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
• peace of mind
• protection for your home and lifestyle

How much does it cost?

The cost depends on:

• your age
• health
• occupation
• smoking status
• level of cover
• deferred period

Many people are surprised that cover can often cost less than expected.

How can a protection adviser help?

A protection adviser will:

• explain the options simply
• compare insurers
• recommend suitable cover levels
• explain policy differences
• help with the application process

Most importantly, an adviser can help make sure 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 people, it can provide valuable financial support and peace of mind during difficult times.