Income Protection Insurance
One of the safest ways to ensure you have a wage coming in when you can’t work.
Get advice & quotes from top UK insurers.
What is Income Protection?
Income protection insurance replaces some of your monthly income if you are unable to work due to illness or injury. It pays you a tax-free monthly income until you return to work, retire, or your policy expires.
Whether you're employed or self-employed, this type of cover is designed to support you and your family by covering your regular outgoings, helping maintain your lifestyle if something unexpected happens.
UK-based experts can help explain how it all works
Do I Need Income Protection?
It's a wise choice! Unlike other protection products like life insurance and critical illness insurance, which are traditionally most suited to people with debts (usually a mortgage), income protection is beneficial for nearly everyone.
That’s because most of us rely on a regular income and would struggle financially to cover our outgoings if we were unable to work. Consider these questions:
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How would I manage financially if I couldn’t work for an extended period?
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Do I have enough savings to cover my expenses during a long-term illness or injury?
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Would my family be affected if I lost my income?
How Much Does It Cost?
Like all insurance-related products, the cost of income protection depends on several factors:
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Your salary
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Your occupation
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Pre-existing conditions
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Level of cover
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Deferment period
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Payout term
Our simple cost and cover calculator can help you determine what insurance you need and provide estimated costs for different types of cover. You can then speak to an adviser or buy online.
How Does Income Protection Insurance Work?
There are five main choices that you’ll need to make:
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Cover level: The amount of benefit you’ll receive each month. You can choose the right level for you, but typically it’s up to 60% of your gross monthly income.
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Cover term: How long you’d like to be protected. This is usually a fixed number of years, such as 25 years, or however many years you expect to be in full-time employment.
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Benefit term: How long the insurance benefit will be paid if you’re ill and unable to work. Many people want the payments to continue until retirement, but you can opt for a shorter term, like two or five years.
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Deferred period: How long after you’ve stopped working you’d like the income protection benefit to start. This depends on whether you have other financial support, such as employer sick pay. If you're self-employed, you might need a shorter deferred period, as you won’t have financial support from an employer.
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Definition of incapacity: This defines what qualifies you to start receiving your insurance benefit. The most common definition is ‘own occupation,’ meaning you qualify if you can’t do your current job. Stricter definitions, like ‘any occupation,’ mean you must be unable to do any job to receive benefits.
Income protection is an essential product for many people, but it can be complex. Speak to one of our friendly advisers, who can guide you through these steps to find the right cover for you.
What Does My Policy Cover?
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Illness: If you are signed off work by your GP for any illness, your policy will start paying out once your deferment period ends. This could include anything from anxiety or depression to a stroke or heart attack. Income protection covers any reason you're forced off work due to illness.
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Accident/Injury: From car accidents and broken bones to putting your back out in the gym, your policy will start protecting you once your deferment period ends, as long as your GP confirms you are unable to work.
What Isn't Covered?
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Death: Income protection doesn’t cover death. For that, you would need a life insurance policy.
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Redundancy: Income protection doesn’t cover redundancy, only health-related absence from work while you’re still employed. Redundancy cover can be bought as part of mortgage protection insurance, so speak with an expert adviser if you’re unsure.
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Dismissal: Similar to redundancy, dismissal isn’t covered under income protection
Can I Get Income Protection If I'm Self-Employed?
Absolutely! Income protection is crucial for those who are contractors, freelancers, self-employed, business owners, or on zero-hours contracts.
Being self-employed means you rely on yourself, your skills, and your health. If you face a health issue that prevents you from working, income protection can help cover your financial needs.
How Compare Life Can Support You
Protecting your financial future is our business. Since 1998, Compare Life has helped over 1.8 million individuals in the UK find the best insurance solutions tailored to their needs, budgets, and future plans. As an independent intermediary, we provide top customer service and ongoing support whenever you need it.
A Little More About Compare Life
Insurance isn’t always easy to understand. There are many types of policies and providers, each with their own options. At Compare Life, we simplify the process, guiding you to the right income protection coverage without the hassle.