Income protection insurance

Income protection that goes the distance

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Peace of mind when it matters

Financial support if illness or injury stops you working

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Understand how cover works before deciding what's right for you

Cover that fits your life

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What is long-term income protection insurance?

Long-term income protection, also known as permanent health insurance, is designed to pay out if you’re unable to work for an extended period – or even if you never work again.

It’s a type of insurance that can replace a chunk of your normal income if you become seriously ill or permanently disabled.

30% of those classed as economically inactive between December 2024 to February 2025 gave long-term illness as the reason, according to UK labour market statistics.

What’s the difference between long-term income protection and permanent health insurance?

There is no difference. Permanent health insurance is simply the name used by the insurance industry for income protection, whether long-term or short-term. It shouldn’t be confused with private health insurance.

What’s the difference between short and long-term income protection insurance?

Short-term income protection policies usually only pay out for one or two years, although a few providers may pay out for as many as five years.

By contrast, long-term sickness insurance can provide a regular, tax-free income if injury or illness means you’re unable to work for a much longer period.

What does long-term income protection insurance cover me for?

If you take out a long-term income protection policy, your finances will be protected against accident and sickness.

If illness or injury leave you unable to work, your permanent health insurance policy will cover a set proportion of your income – between 50% and 75%, depending on the policy.

Some policies allow you to claim more than once. This means that if you’re ill, recover, and then fall ill again, you could still claim.

And if you were to suffer from a serious disease or condition such as cancer or a permanent disability, the policy could pay out until you retire, die or become well enough to work again.

As with any type of insurance, policies vary between providers. Always read the terms and conditions carefully to make sure you understand exactly what you’re covered for.

Are there any exclusions?

As a rule, you’ll find standard exclusions typically include:

  • Being unemployed

  • Self-inflicted injuries

  • Injuries or illness resulting from drug abuse, alcohol misuse, criminal acts or war

  • Undertaking other employment (paid or unpaid) while receiving income protection benefit.

Am I eligible for long-term income protection insurance?

Eligibility criteria can differ between providers. That’s why it’s important to check all the details as well as policy terms and conditions before you apply.

For example:

  • Certain medical conditions and pre-existing illnesses may be excluded

  • You may need to have been on sick leave for a certain amount of time before the benefit will apply

  • Your policy might require that your employer has looked at and made any reasonable adjustments to enable you to return to work

  • You may need to satisfy the insurance provider’s medical assessment that you’re incapable of carrying out your role due to illness or injury.

You may also need to undergo regular medical reviews by the insurance provider’s medical adviser. This is so it can assess whether you continue to meet its eligibility criteria.

Do I need long-term income protection insurance?

While there’s no requirement to have any long-term income protection, it could be very useful. To help you decide whether you may benefit from it, here are some questions to ask yourself:

  • Would state benefits be enough to support your current lifestyle if you had to stop working? 

  • Are there any employee benefits you’d be entitled to? Check with your employer as you might be eligible for cover through a staff benefit scheme.

  • Would you be able to live off any savings you have until you reach retirement age?

Suffering a sudden loss of income with the trauma of an accident or illness can have a huge impact on you and your family. Long-term income protection could give you peace of mind that if something happens to you, your financial future is protected.

What should I look out for when buying long-term income protection?

When exploring long-term income protection policies, you’ll want to consider one that matches your needs and budget.

Here’s what you need to look out for:

Deferred period

The deferred period is how long you’ll have to wait until payments can start after you fall ill or injure yourself. Most policies have a minimum four-week waiting period. However, some can be as much as two years.

Level of cover

This is the amount your insurance provider will pay out. You can typically cover 50% to 75% of your gross income. But the more you cover, the higher your premiums may be.

Type of cover

Own occupation cover is the most comprehensive policy you can buy. It enables you to claim if you’re unable to do your specific job. Suited or any occupation cover is cheaper but harder to claim as you’ll have to prove you’re too ill to do any kind of work.

Payment period

The longer the payment period you choose, the higher your premiums are likely to be.

Type of premium

You’ll usually have three premium types to choose from:

  • Guaranteed – the price will remain fixed for the duration of your policy

  • Reviewable – this is reviewed by your insurance provider every few years, and they’ll adjust the price as they see fit

  • Age-banded – premiums increase as you get older, but only by a pre-set rate stated in your policy.

What do I need to get a quote?

We’ll need you to answer a few questions about:

  • The kind of job you do

  • Your health

  • If you’re employed or if you’re self-employed

  • If you’re a smoker or if you use nicotine-based products

  • The deferred period you want

  • The amount of cover you’re looking for, based on your monthly income

We’ll then send you a list of suitable quotes, so you can compare them.

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Tim Knighton

What our expert says...

“Before taking out income protection insurance, check your employment contract to see if you’re already covered under your sick pay arrangements. And check if you’re entitled to any state benefits if you’re unable to work.

“This won’t prevent you from taking out income protection cover, but some insurance providers may reduce the payout amount if you also receive state benefits.”

Tim Knighton, Life, health and income protection insurance expert

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FAQs

What’s the difference between long-term income protection cover and critical illness cover?

Critical illness cover pays a lump sum if you’re diagnosed with an illness specified on your policy, such as cancer.

Income protection pays a regular income for a set period if you’re deemed too ill to work, regardless of the condition. This can include mental illness if you have long-term cover.

Because critical illness insurance only covers a limited range of illnesses, policies tend to be cheaper than income protection insurance.

What types of long-term income protection can I get?

Long-term income protection policies generally offer two main levels of cover, based on your incapacity following an accident or illness:

  • Own occupation – this lets you make a claim if an accident or illness prevents you from carrying out any aspect of your job. It tends to be the more expensive option, but also the most comprehensive.

  • Suited occupation – this level of cover only pays out if you’re unable to carry out any occupation suited to your level of experience and training. You won’t be able to claim if there are other jobs you can do.

House person cover may also be available. If you’re not working when you become ill, this type of cover could pay for someone else to help with your daily living tasks.

How long does long-term income protection cover last?

Most policies run for a minimum of five years and will go on until you reach your planned retirement age. You might weigh up a policy that lasts until you plan to retire, because then you’ll have earnings cover in place for the rest of your working life.

How much of my income will the policy cover?

That depends on how much you earn and which premium you choose. In many cases, you can insure a set percentage of your pre-tax earnings, typically between 50% and 75%.

Think about how much you want to protect. As a minimum, you’d want to cover your essential monthly outgoings such as rent or mortgage payments, household bills and any debt. You will also want an allowance for everyday spending.

What can I use income protection for?

There are lots of reasons why permanent health insurance could be useful:

  • To pay rent or mortgage repayments 

  • To repay a loan, credit card, car finance or other debts 

  • To cover your monthly living costs, including food, clothes, utility bills and internet 

  • To fund general lifestyle costs e.g. holidays, school trips and weekends away.

How much does long-term income protection insurance cost?

The cost of your permanent insurance premium will depend on factors that include:

  • Your age – the younger and fitter you are, the cheaper your premium should be as there’s less risk of you falling ill. 

  • Your job – if your occupation is high-risk, such as a builder or firefighter, your premium will typically be more expensive than that of an accountant. 

  • The length of your policy – a policy that lasts up to retirement age will cost more than one that only lasts for a few years. 

  • The length of your deferred period – typically, the longer the waiting period for the policy to pay out (the deferred period), the cheaper your premium will be. This is because your insurance provider will have less to pay.

What is a deferred period?

The deferred period is the time you’d have to wait before your policy starts to pay out. It makes sense to arrange for the policy to kick in when your employee sick pay stops. Check your work contract, as this will vary between employers.  

It’s worth remembering that the longer the deferred period, the lower your premium is likely to be. 

Can I get long-term income protection if I’m self-employed?

Yes, you can. If anything, long-term income protection could be even more important if you work for yourself. As a sole trader, you won’t enjoy some of the same rights as an employee, and nobody pays you for time off if you’re sick or injured.

So, self-employed income protection is well worth considering.

Will my policy cover unemployment?

Most long-term income protection policies are designed to cover accidents and sickness only. Short-term income protection can cover you for accident, sickness and unemployment if you’re unable to work for a short period of time.

What happens to my income protection policy if I change jobs?

If your new job is considered a higher risk than your previous one, the cost of your premiums could go up. On the other hand, if it’s lower risk, you might pay less. You should tell your insurance provider if you change jobs during your policy term (the length of your policy). If you don’t, it could invalidate your cover.

How do I compare long-term income protection?

You can compare long-term income protection through Compare the Market. It’s quick and easy.

Policies may vary slightly among providers. It’s always a good idea to check the details and features of each one to make sure you get the right cover for you.

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Amy Rootham
Reviewed 16 Sept 2025 by Amy Rootham Insurance expert

Amy helps make sure you get the best value when choosing insurance. Thanks to more than four years’ experience at Compare the Market, she understands what people look for, working closely with insurance providers to offer you deals and services that are fair, easy to understand and right for your needs.

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1Based on Trustpilot ratings (July 2026).