Income protection insurance
Keep money coming in when you need it most
- Offers a replacement income if you’re unable to work through illness or injury
- Covers most physical conditions and mental health
- Plus, enjoy fantastic rewards, on us*
What is income protection insurance?
Income protection insurance offers financial protection in the form of a replacement income if you’re unable to work due to illness or injury. It could help you pay essential household bills like your mortgage, utilities and food while you focus on your recovery.
Only around 6% of people have income protection insurance in the UK, according to the Financial Conduct Authority’s 2022 Financial Lives Survey.
But if you’re worried about what might happen if you become ill or lose your job, income protection insurance could offer you and your family security.
What do I need to get a quote?
Once you’ve chosen the type of income protection cover you want, you’ll need to give us the following information:
- Your name, age and address
- The type of job you do
- Whether you’re employed or self-employed
- Your annual income before tax
- The deferred period you choose – this is the length of time you agree to wait before payouts begin
- The amount of cover you want, based on your monthly income.
What are the benefits of income protection insurance?
- A regular income if you’re unable to work can give you financial peace of mind during a difficult time.
- Income protection insurance can give you longer-term financial protection than critical illness cover.
- Payouts are typically tax-free.
- You may get access to rehabilitation and support to help you get back to work.
Do I need income protection insurance?
Whether you need income protection insurance depends on your financial situation and personal circumstances.
Do you or others rely on your income to cover regular household bills? If so, an income protection policy could ensure your lifestyle remains unaffected if you’re unable to work.
Even if you’ve built up a pot of savings, you could quickly burn through it without a regular salary coming in, leaving you without anything to cover unexpected expenses.
If you’re self-employed or you’re employed but only have statutory sick pay (SSP) to fall back on, income protection could offer a vital safety net.
But you may not need income protection if:
- You already have income protection insurance as part of your work benefits.
- You have some form of illness cover through another insurance policy or even with your mortgage.
- You have savings to fall back on to cover everyday expenses if you’re unable to work.
If you’re not sure whether income protection is right for you, talk to an independent financial advisor. They can offer expert advice and take you through your options.
What other illness insurance policies could I consider?
Critical illness cover is another type of illness insurance policy you might want to consider.
It pays out a one-off lump sum if you’re diagnosed with a serious illness or injury covered by your policy. Critical illness cover is often bought together with life insurance.
Critical illness insurance can be cheaper than income protection. But it does come with limitations. It only covers a limited amount of illnesses, and you can only claim once.
Income protection and critical illness insurance only cover you if you’re unable to work for medical reasons. If job loss is something you’re concerned about, you might be better off with an accident, sickness and unemployment policy.
This includes loss of work insurance, which could cover you if you’re made redundant or lose your job through no fault of your own.
How much is income protection insurance?
The cost of income protection insurance in the UK can vary quite significantly due to several factors, including:
- Your age – the older you are when you take out the policy, the more you’re likely to pay. That’s because there’s a greater risk of you falling ill and needing to make a claim.
- Your job – the riskier your job is considered to be, the higher your premiums will be. Builders and mechanics are likely to pay more than accountants and office workers, for example. And be aware that different insurance providers may assess the same job differently in terms of risk.
- The length of cover – short-term policies are cheaper than long-term ones.
- Your lifestyle – if you smoke or have pre-existing health conditions, you may be more vulnerable to severe illness. This means you could be more likely to make a claim.
- The deferred period – the longer you can wait before you start to receive your replacement income, the cheaper your premium is likely to be.
- Your ability to do alternative work – income protection will cost more if you want to be covered for your specific role, rather than not being able to do alternative work.
What does income protection insurance cover?
Income protection policies typically cover most illnesses and injuries that leave you unable to work. These include:
- Musculoskeletal problems like back pain or broken bones. Back and neck pain were the biggest causes of income protection claims in 2022, according to the Association of British Insurers (ABI).
- Mental health conditions, including depression, stress and anxiety.
- Serious illnesses, such as cancer, heart disease and stroke.
While these are common reasons for claiming, you’ll only receive a payout if you meet your provider’s specific criteria for being unable to work. This is often referred to as ‘definition of incapacity’.
Income protection usually pays out until you return to work, retire, die or the policy ends, whichever is sooner. You can claim as many times as you need to while the policy lasts.
What isn’t covered by income protection insurance?
Your income protection policy may exclude certain types of illness or injury: for example, self-harm.
What’s more, you might not be covered for certain pre-existing medical conditions and illnesses that run in the family. You may even be asked to pay more for your premium, but your provider should be clear about this.
Some policies also state that you can’t make a claim if your illness or injury doesn’t prevent you from doing other types of work, even if you have to give up your current job.
What our expert says...
“You don’t have to work full-time to apply for income protection insurance. If you’re a part-time worker you may be able to find a policy that’s flexible enough to meet your needs and provide a valuable safety net.”
- Tim Knighton, Insurance expert
Join thousands of Trustpilot reviewers who save with Compare the Market
As of April 8th 2025, Compare the Market had an average rating of 4.8 out of 5 from 79,257 people who left a review on Trustpilot. The score 4.8 corresponds to the Star Label ‘Excellent’. Learn more about our rating
What level of income protection insurance do I need?
Here’s how to work out the level of income protection insurance you might need:
- Start off with how much your current monthly take-home pay is.
- Take away the amount you’d receive in state benefits.
- Take away any work-related costs, like travel, food and clothing.
- Add any extra expenses you’d need to pay for if you became ill or disabled – for example, extra heating or medical equipment.
If you’re not sure how much cover you’ll need, the Association of British Insurers’ Protection Calculator could help you estimate the costs.
For a more accurate assessment, you might want to seek the help of an independent financial advisor.
How much will I get from income protection insurance?
Income protection usually only covers a percentage of what you earned before you were unable to work. This is typically around 50% to 70% of your gross monthly income. This is because the income you get from the policy is tax-free.
When taking out a policy, you’ll usually have the option to link your income protection to a measure of inflation, such as the Retail Prices Index (RPI).
This helps to ensure any future payout you receive will remain in line with cost-of-living rises. But your premiums may also go up if you choose this option.
Compare income protection
It’s easy to compare income protection insurance with Compare the Market. We’ve partnered with Howden, so you’ll be able to compare prices and different levels of cover.
Just fill in your details and what cover you’re interested in. It only takes a few minutes to see what quotes could be available to you.
Start a quoteFrequently asked questions
What is group income protection?
Group income protection is a policy offered by some employers to their staff. It usually forms part of an employee’s benefits package. Group protection often includes rehabilitation services and wellness support to help those off sick return to work.
The employer pays for the insurance and receives the payout if a successful claim is made. This is then passed on to the employee via the PAYE system instead of being a tax-free payout.
What’s the difference between life insurance and income protection?
In a nutshell, life insurance is for when you die, while income protection is for when you can’t work.
Life insurance pays out a lump sum if you die during the policy term. It provides financial support to your family so they can still pay the bills after you’re gone.
Income protection gives you a monthly pay-out if you can’t work because of illness or injury.
Do I need income protection if I have critical illness cover?
Critical illness insurance could pay out a lump sum if you’re seriously injured or diagnosed with a serious illness specified in your policy. But it does have some limitations.
An income protection policy generally offers a broader definition of illness and injury. If you’re off work with a bad back or depression, for example, you might find that these conditions aren’t covered by critical illness insurance.
