Get support if illness stops you working
Income protection could replace some of your earnings while you recover
Understand what your cover could do
Learn how income protection works and what different policies may offer
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Income protection insurance is a type of policy that pays you a regular income if you can’t work because of illness or injury. It usually covers 50-70% of your salary and continues until you recover, retire, or your policy ends.
This helps cover essentials like mortgage, rent, and bills, giving you financial security while you focus on recovery.
Income protection insurance pays you a regular income if illness or injury stops you working. It kicks in after a set waiting period and continues until you're fit to return or the policy ends. Here’s how it works:
Whether or not you need income protection insurance depends on your financial situation and personal circumstances. Here's what’s worth thinking about:
Ask yourself | Why it matters |
|---|---|
Could you cover bills without a wage? | If your savings would run out quickly, it’s worth considering a policy. |
Do you have children or other dependants? | More outgoings usually means less room to absorb a drop in income. |
Would a partner’s income carry you both? | Think about whether your partner’s salary alone would be enough. |
What would your employer pay you? | Many companies offer full pay for a short spell, dropping to half pay or Statutory Sick Pay (SSP) after that. Check your contract to confirm. |
Do you already have similar cover? | Critical illness cover pays a one-off lump sum for specific serious illnesses, whereas income protection pays out regularly and covers a wider range of situations. |
Could you claim benefits? | You might be entitled to some government support, but it's typically far less than your usual salary or an income protection payout. |
Musculoskeletal problems, such as back pain or broken bones.
Mental health conditions, such as depression, stress and anxiety
Serious illnesses, such as cancer, heart disease and stroke.
Certain types of illness or injury, such as self-harm
Certain pre-existing medical conditions and illnesses that run in the family. You may even be asked to pay more for your premium in such cases, but your provider should be clear about this
Illnesses or injury that don’t prevent you from doing other types of work, even if you have to give up your current job.
Income protection policies typically cover most illnesses and injuries that leave you unable to work.
While the above 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 sometimes referred to as ‘definition of incapacity’.
Always check your policy terms, as exclusions can vary between providers.
Bear in mind...
You’ll need to tell your insurance provider about any dangerous hobbies and high-risk sports you do. If you fail to disclose anything that affects a claim, they could refuse to pay out.
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.
The riskier your job is considered to be, the higher your premiums will be (though this may differ by provider). Builders and mechanics are likely to pay more than accountants and office workers.
Short-term policies are usually cheaper than long-term ones.
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 longer you can wait before you start to receive your replacement income, the cheaper your premium is likely to be.
Income protection will cost more if you want to be covered for your specific role, rather than not being able to do alternative work.
To work out how much cover you might need, think about the income you’d lose and the cost you’d still have to pay.
Quick tip
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 adviser.
Income protection usually covers only part of your income before you had to stop working. This is typically around 50% to 70% of your gross monthly income. This is because the money paid out is usually tax-free.
When you take out a policy, you may be able to link it to inflation, such as the Retail Prices Index (RPI).
This means your payout could rise over time to help keep up with the cost of living. But your premiums may also increase if you choose this option.
To get a quote, we’ll ask for some details about you, your job, your income and the cover you’re looking for.
We’ll need to know:
Your name, age and address
What type of job you do
Whether you’re employed or self-employed.
To find policies that could suit you, we’ll need to know:
Your annual income before tax
How much cover you want, based on your monthly income.
This is the length of time you agree to wait before payouts begin, and is sometimes known as the ‘waiting period’.
It could be as little as four weeks or as long as a year.
A longer deferred period will usually mean a lower premium, but you’ll need to make sure you could manage financially until payouts begin.
See more advice on protecting your income if you're unable to work
You can usually cancel within 30 days of taking out an income protection insurance policy and get a refund of any premiums you’ve paid.
You can still choose to cancel your policy at any time after this, but you may not receive any refund of the premiums you’ve paid up to that point.
If your circumstances have changed, you may be able to adjust your policy instead of cancelling. If you’re thinking of cancelling because you’re struggling to pay your premiums, it’s worth getting in touch with your provider to see what support it offers.
Income protection insurance pays you a regular, usually tax-free income if you can’t work due to illness or injury, helping you cover essential outgoings while you’re off work. It can provide longer-term cover than critical illness insurance and some policies include rehabilitation or support to help you get back to work.
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.
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 payout if you can’t work because of illness or injury.
Whether you need both critical illness cover and income protection insurance is down to your personal circumstances and your budget. Having both could give you a broader and stronger financial resilience, but it also means paying for two premiums.
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.
Standard income protection insurance policies don’t cover against redundancy. You should be able to find this form of cover in Accident, Sickness and Unemployment (ASU) insurance policies, and some mortgage payment protection insurance (MPPI) policies.
No, income protection insurance premiums aren’t usually tax-deductible for most people, but the rules can be different if you’re self-employed or run a business.
When you take out a policy personally, you’ll pay for it from your post-tax income. But if your limited company pays the premiums, they can sometimes be classed as a business expense – although this can mean any payouts are taxed as income.
Tim Knighton is an expert in building and managing relationships with big brands for the benefit of customers, with more than 20 years of experience. He seeks out the right products that look after you and those you love most during the toughest times.
1 Based on the % of respondents claiming they have used Compare the Market in the last 12 months vs. other leading PCWs. Source: Savanta BrandVue Financial Services, National Representative Survey of 12,257 respondents (June 2026)
What our expert says...
"One of the biggest misconceptions about income protection is that it only pays out for serious illnesses. In reality, the most common claims are for musculoskeletal conditions and mental health issues.
“When choosing a policy, it’s important to check the definition of incapacity, as this determines how easily you can claim.”