Income Protection Insurance Advice

Income Protection Insurance

Income protection pays you a regular, tax-free income if you cannot work because of illness or injury, typically 50% to 65% of your gross earnings, until you recover, return to work or the policy term ends. Your ability to earn is almost certainly your most valuable financial asset: income protection is how you insure it.

The gap it fills

Employer sick pay, where it exists at all, usually runs out long before a serious illness does. After that, Statutory Sick Pay is a little over £120 a week and lasts a maximum of 28 weeks. If you are self-employed, there is no sick pay at all: the income stops the day you do. Income protection exists to bridge exactly that gap, paying month after month for as long as you cannot work, within the policy term.

How income protection works

You choose a deferred period: how long after stopping work the payments begin, from day one to 12 months. The longer the deferral, the lower the premium, so we align it with your employer’s sick pay or, if self-employed, your emergency savings.
Claims are based on your income, usually evidenced by payslips or, for the self-employed, accounts or tax returns. There is no need to itemise your mortgage or bills.
Payments are tax-free and continue until you return to work, reach the end of the policy term, or reach the policy’s retirement age.
You can claim more than once. Unlike critical illness cover, income protection resets after each claim, covering you for the whole term.

Long-term or short-term cover?

Long-term income protection pays out for as long as you cannot work, potentially to retirement age, and is medically underwritten when you apply, so you know where you stand before you ever claim. We regard long-term, own-occupation cover as the gold standard.

Short-term policies (including accident, sickness and unemployment cover) are cheaper but pay for a limited period, typically 12 to 24 months, and are often underwritten at claim time, which creates more ways for a claim to fail. They have their place; we will tell you honestly which you need.

The detail is where claims are won and lost

Two policies with similar premiums can behave very differently at claim time. The definition of incapacity matters most: an “own occupation” policy pays if you cannot do your job, while “any occupation” policies pay only if you can do no job at all. Exclusions, indexation, and guaranteed versus reviewable premiums all shift the value materially. This is a market where the cheapest quote is frequently the worst value, and precisely where independent advice earns its keep.

Find out what cover would cost you

Tell us what you earn and what sick pay you have, and we will show you the realistic options and premiums. Your first meeting is free and without obligation.

Policies have eligibility conditions and exclusions; cover and premiums depend on individual circumstances.

Frequently Asked Questions

How much does income protection pay out?admin2026-08-20T09:35:43+01:00

How much does income protection pay out?

Typically 50% to 65% of your gross earnings, paid monthly and tax-free. Because payments are tax-free and your outgoings usually fall while off work, this level generally maintains a liveable income. You choose the amount of cover, within the insurer’s limits, when you apply.

Can I get income protection if I am self-employed?admin2026-08-20T09:36:09+01:00

Can I get income protection if I am self-employed?

Yes, and it is arguably more important for you than for anyone employed, because there is no employer sick pay to fall back on. Insurers assess your earnings through your accounts or tax returns, and cover is based on your trading income. We advise self-employed clients on this regularly.

Does income protection cover redundancy?admin2026-08-20T09:36:31+01:00

Does income protection cover redundancy?

Standard long-term income protection covers illness and injury only. Unemployment cover exists as a short-term add-on, typically paying out for up to 12 months, and comes with strict eligibility conditions. We will tell you honestly whether it is worth adding in your circumstances.

What deferred period should I choose?admin2026-08-20T09:36:52+01:00

What deferred period should I choose?

Match it to how long you could cope without the policy: your sick pay entitlement if employed, or your emergency fund if self-employed. Extending the deferred period from 4 weeks to 13 or 26 weeks can cut premiums substantially, which often makes better cover affordable.

What does “own occupation” mean and why does it matter?admin2026-08-20T09:37:12+01:00

What does “own occupation” mean and why does it matter?

It is the definition of incapacity the insurer uses. An own-occupation policy pays if illness or injury stops you doing your own job; an “any occupation” policy pays only if you cannot do any work at all, a far harder test to meet. Own-occupation cover is the standard we recommend wherever available.

Is income protection worth it if I have savings?admin2026-08-20T09:37:40+01:00

Is income protection worth it if I have savings?

Savings buy you time; income protection buys you as long as it takes. A healthy emergency fund might cover six months, but a serious illness can keep you off work for years, and long-term claims average measured in years rather than months. Many clients use savings to justify a longer deferred period, cutting the premium while keeping the long-term protection.

Last reviewed: August 2026

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Income Protection Insurance Advice