Why Do I Need Income Protection Insurance?
Many people don’t have enough savings to cover more than a few months off work. Income protection helps with:
- Monthly rent or mortgage payments
- Household bills and living costs
- Childcare and family expenses
- Keeping up with loan or credit card repayments
We can advise you on the most suitable policy from trusted UK insurance providers, tailored to your job and lifestyle.
What’s Covered?
Most claims are due to:
- Musculoskeletal conditions (e.g. back pain)
- Mental health issues (e.g. stress, anxiety, depression)
- Accidents or serious illnesses
Policies vary, so we’ll guide you through what’s included and how long your cover will pay out.
How does income protection function?
When you purchase income protection insurance, the coverage amount you select is determined by a percentage of your income, generally ranging from 50% to 70%. In the case of a claim, the policy will provide payments until you are able to return to work, or until the policy term concludes, retirement, or death occurs – whichever comes first.
Income protection policies do not initiate payments immediately upon filing a claim. You must wait for a predetermined period, referred to as a ‘deferral period’, to elapse. This period is established when you acquire the coverage and can vary from a few weeks to up to a year. Typically, deferred periods are 13 or 26 weeks, but opting for a longer deferral period will result in lower premiums. However, if you select an extended deferral period, you must ensure that you can manage on your sick pay or that you possess sufficient savings to cover all your expenses.
Income protection insurance can operate in various manners, so it is essential to review the fine print thoroughly. For instance, if an income protection policy is set up on an ‘own occupation’ basis, it will provide benefits if you are unable to perform your specific job due to illness or injury. Conversely, if the coverage is established on an ‘any occupation’ or ‘work tasks’ basis, it will only pay out if you are incapable of performing any type of work.
Payments from personal income protection policies are exempt from taxes. Income protection coverage is distinct from accident, sickness, and unemployment insurance (ASU), which typically offers coverage for one or two years in the event that you are unable to work or lose your job. It should also not be mistaken for critical illness coverage, which provides a one-time lump sum payment if you are diagnosed with a severe illness such as cancer or heart disease.
Do I require income protection?
If you are uncertain about whether you need income protection, consider how you would manage financially if you were unable to earn an income due to an illness or injury. Most employers will only provide support for
Some commonly asked questions about Income Protection
Usually up to 50–70% of your income.
Until you return to work, retire, or reach the end of the policy term.
Not always — it depends on your health and policy type.
Yes, most modern policies do
Yes, personal income protection payouts are typically tax-free.
After a waiting period (called a ‘deferred period’) — usually 4, 8, or 13 weeks.
Yes, it’s actually one of the most important protections for self-employed people.
Yes — as long as the condition is valid and you’re covered.
No — income protection is a much broader, more reliable form of cover.
Many policies offer flexible options as your circumstances change.
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