What is Income Protection?

  • Protect your income if unable to work due to accident or sickness
  • Short-term and long-term options available
  • Can pay out up to 70% of your gross salary
  • Affordable monthly premiums from 20p-a-day ‡
  • Cover options to suit every need and budget
Income protection summary


Income protection insurance (or income protection) is a type of policy that pays out a percentage of your usual income to help replace lost earnings if you’re unable to work as a result of sickness or accident.

The monthly payments you receive can be used to help cover essential costs that your income would usually cover, helping to alleviate financial stress at an already stressful time.

You can take cover out on a short-term (payment period for a maximum of two years) or long-term (potential to receive payments up until retirement) basis.

The option that’s best for you will depend on your personal circumstances and available budget.

Taking out cover through a broker, like Reassured Advice, can help you to secure the best income protection insurance to meet your needs.

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Why do I need income protection?

Being unable to work can take a huge toll on your finances and it can be hard to make ends meet without your usual earnings.

Anyone who’s worried about what may happen if they were unable to work due to illness or injury may benefit from having income protection insurance in place.

In particular, you may benefit from income protection if you:

  • Are self-employed
  • Don’t receive full sick pay
  • Don’t have personal savings
  • Don’t have another source of income, (such as additional income from partner or spouse)

Income protection insurance can offer support by helping to replace lost funds as a result of not being able to work, so you can continue your current lifestyle with minimal financial disruption.

The payments you receive can help you to:

  • Make rent or mortgage payments
  • Cover household bills and utilities
  • Afford daily living expenses
  • Pay for childcare
  • Pay back debts
  • Fund leisure activities

Why not get in touch with a friendly member of the Reassured Advice team to find out about your income protection options?

How much income protection insurance do you need?

Enter your monthly financial commitments to calculate the level of income protection cover you require.

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£723 a month is the average monthly mortgage payment in the UK, with the average monthly rental price coming in at £700.

The majority of our monthly income will go towards rental or mortgage payments.

For this reason, it’s essential to have precautions in place to ensure you could keep up to date with your payments if you weren’t receiving your usual income.

Monthly income protection payments can help to cover this large expense and ensure you can stay in your home.
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According to the Money Advice Service, the average household spends £340 a month on household bills.

This includes electricity, gas, TV and broadband.
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Childcare costs are on the rise with it now costing £137.69 per week for part-time nursery for a child under the age of two.

That’s over £550 per month - is this an amount you’d be able to keep up with if you were unable to work?

Becoming ill could also result in the need for additional childcare while you attend doctors’ appointments or medical treatment.
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The average household in the UK spends around £97 a week on their food shop, totaling £388 a month.

While this may seem like a small amount in comparison to some of the other expenses mentioned, the food shop is often where we try to scrimp and save when we fall on hard times.

Income protection can take care of the cost of your weekly food shop, as well as many other essential costs.
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At the beginning of 2020, credit card debt in the UK was at £2.1 billion, with almost 27 million UK residents in some kind of debt.

Becoming unable to work could make it hard to keep up with credit card or loan payments (including car finance or other financed goods).

Failure to keep up with payments could result in additional interest being incurred or late fees issues - resulting in a higher total needing to be paid.
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The average spent on public transport each month comes to an average of £94.

This includes the cost of public transport, as well as petrol and diesel vehicles.

While this amount may reduce while you’re unable to work as you won’t need to commute there may be additional spending on public transportation if your illness or injury leaves you unable to drive.
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Your total cover estimate

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How does income protection work?

Income protection insurance works by paying out a percentage of your usual income in the event you become unable to work due to accident or sickness.

Typically, between 50 - 70% of your usual income will be paid out, but this can vary between providers.

Rather than a lump sum pay out, you’ll receive monthly (tax-free) instalments which can help you to make ends meet while you’re unable to work.

During the application process, you’ll decide on a ‘deferred’ or ‘waiting’ period. This is the period of time after which your payments will commence.

Common waiting periods range from 4 weeks up to 12 months, but can be shorter or longer depending on what best meets your needs.

If you’re still unable to work once your deferred period has come to an end, your payments will begin and shall continue until whichever of the following happens first:

  • Your payment period comes to an end
  • You return to work
  • You retire
  • Your policy comes to an end

A friendly member of the Reassured advice team can take you through every step of the application process and answer any questions you might have.

What is income protection infographic desktop

What does income protection insurance cover?

Income protection insurance will cover you for accident or sickness. This means:

  • Any long term serious illness that prevents you from working
  • Any injuries sustained as a result of an accident (whether this be at home or at work)

The payments received from an income protection insurance policy could be used to cover whatever you see fit, as they aren’t tied to a specific financial commitment.

Income protection insurance can cover a range of financial commitments, including:

  • Mortgage payments or rent
  • Household bills
  • Family living costs
  • Childcare costs
  • Debt or loan payments (such as credit card bills)
  • Leisure/travel costs
  • Food shop
  • Other essential costs

We have written a dedicated what does income protection cover article if you require additional information »

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What doesn’t income protection insurance cover?

Income protection insurance will only pay out to you if you can’t work due to illness and injury, meaning it won’t cover you for:

  • Pre-existing illnesses
  • Death
  • Unemployment
  • Redundancy
  • Self-inflicted injuries
  • Injuries or illness as a result of alcohol or drug abuse

What types of income protection are there?

Income protection insurance can be taken out on a short-term or long-term basis.

Both options will cover you for accident and sickness and will pay out up to 70% of your usual income.

With both short and long term cover you’ll need to choose a definition of incapacity, which will dictate the terms of your policy.

Incapacity refers to the inability to do something and, in terms of income protection, this refers to the inability to work.

There are three main definitions of incapacity, these include:

  1. Own occupation - offers the most comprehensive cover as you’ll be able to claim if you’re unable to do your specific job role and won’t be asked to carry out any related jobs
  2. Suited tasks - you’ll only be able to claim if you can’t carry out your job role or another job role that suits your knowledge and experience. This means if you can’t perform your usual job you may be asked to take on another job that suits your skills instead
  3. Any occupation - you’ll only be able to make a claim if you can’t carry out any work at all. Often this definition of incapacity requires total disability for a claim to be successful

^Incapacity refers to the inability to do something, in regards to income protection this refers to the inability to work

Speaking to an expert can help you to determine the right policy for you, so why not get in touch with Reassured Advice?

What is the cost of income protection?

The cost of income protection insurance will vary from person to person as your premium is calculated using information unique to you.

Key information taken into consideration during the application process includes:

  • Age
  • Medical history
  • Smoking status
  • Occupation
  • Policy type (long-term or short-term)
  • Length of payment period
  • Length of deferred period
  • Definition of incapacity

In terms of income protection, occupations are often split up into different ‘class groups’ based on risk.

Low risk occupations (for example, professional or administrative roles) can be seen as low risk and those in these professions can experience lower premiums.

Whereas higher risk occupations (such as those in the construction industry or those that work at height) may pay more for their premiums due to the increased risk.

It’s important to note that class groups can vary between providers, which highlights the need to compare multiple quotes to find the most affordable cover.

The price you pay for income protection insurance can also depend on which premium payment you choose. Common premium payment types include:

  • Guaranteed - The amount you pay each month remains the same throughout the policy lifetime
  • Reviewable - The insurer has the right to change the amount you pay each month, based on various factors (such as increased risk)
  • Age banded - The price you pay will increase each year as you age

How much is income protection insurance per month?

It’s possible to secure income protection insurance from just £5 ‡ a month through Reassured Advice.

However, no two quotes are the same as we all have different circumstances and budgets.

The exact price you pay will be determined during the application process using the factors mentioned above.

Get in touch with a friendly member of the team at Reassured Advice to get the best price on a policy that meets all of your needs.

How much income protection do I need?

How much income protection insurance you need will ultimately depend on your personal circumstances.

The amount providers will pay out to you will depend on your income as they will pay out a percentage of this amount - often up to a maximum of 70%.

You may want to consider the following factors when taking out cover:

  • How much you earn
  • Your current savings
  • What financial commitments you have
  • Whether you have any other sources of income
  • If you receive full sick pay
  • Whether you have any other financial protection

If you have other forms of finance available to you, it may not be required to take out the full amount of cover that’s offered to you.

How to claim income protection insurance

You can make a claim on an income protection policy after you become incapacitated and unable to work. This could be through:

  • Serious illness
  • Injury sustained as a result of an accident

To make a claim you’ll simply need to contact your provider, who’ll be able to talk you through your next steps.

It’s likely that your provider will require you to fill in a form and they may ask you to provide medical evidence of your illness or injury.

You may wish to have any doctors notes or medical evidence to hand at the time of your claim to speed up the process.

Once your claim has been approved, you’ll need to wait for your deferred period to pass before any funds are paid out to you.

It can be possible to make multiple claims on your income protection insurance policy.

When does income protection insurance pay out?

An income protection policy will pay out to you once your deferred period has passed.

This means the policy won’t pay out to you straight away (unless you have chosen a Day-1 deferred period).

If you’re still unable to work after your deferred period has passed, your payments will commence.

What is an income protection insurance deferred period?

A deferred period refers to a fixed period of time after which cover will commence and your payments will be issued.

How long you’d like your deferred period to be is decided during the application process.

Many people choose to have their deferred period end when their sick pay is likely to come to an end - to ensure they still have financial help once this benefit has ended.

Alternatively, in the case of self-employed workers, you may wish to assess your personal finance and establish how long you could live comfortably before you would need your income protection payments to kick in.

Deferred periods can range from as little as 3 days (known as a ‘Day 1’ deferred period) or as long as 12 months.

How long does income protection insurance pay out for?

An income protection insurance policy will pay out to you until one of the following happens:

  • Your payment period comes to an end
  • You return to work
  • You retire
  • Your policy expires

With short-term income protection insurance, your payment period is usually a maximum of 1 - 2 years but this can vary between providers.

Long-term income protection insurance allows you to have a much longer payment period and it can be possible to receive payments up until you retire if you’re unable to return to work.

Is income protection taxable?

No, income protection payments are tax-free.

This is because you typically pay for cover out of your net income, which has already been taxed.

Life insurance with income protection insurance

Income protection and life insurance are two different policy types which will cover different things. While they both offer financial protection, they do so in different ways.

Income protectionLife insurance
Will pay out if you can’t work due to illness or injuryWill pay out to your loved ones if you pass away (within the term of your policy)
Provides monthly (tax-free) paymentsProvides one lump sum pay out
Cover can be short or long-termCover can be for a set period of time (term life insurance) or last for life (whole of life insurance)
Will pay out for a wide range of illnesses and injuriesWill pay out for a wide range of deaths
Payments can help you to keep up with financial commitments to alleviate financial stressLump sum pay out can help loved ones take care of financial commitments after your passing
Affordable premiums from 20p-a-day through Reassured AdviceAffordable premiums from 20p-a-day through Reassured †


Income protection will pay out to you while you’re incapacitated and unable to earn your usual income.

Whereas life insurance will pay out to your loved ones upon your passing.

Income protection can’t be added to a life insurance policy but, if it’s within your budget, it’s possible to take out both policies simultaneously for a comprehensive financial protection solution.

An income protection policy to offer financial support while you’re off work and a life insurance policy to secure the financial future of your family.

Why not check out our family life insurance page to find out more?

Use the services of Reassured Advice for a full life insurance vs income protection comparison.

Income protection or critical illness cover?

Both income protection insurance and critical illness cover can be used to replace lost income as a result of serious illness. However, there are some key differences to be aware of.

Income protectionCritical illness cover
Will pay out monthly payments if you’re too ill or injured to workWill pay out a lump sum if you’re diagnosed with a serious illness
You can make a claim for any illness that prevents you from working, there’s no set listIllness must be listed within your policy and must meet the insurers definition
Will not cover pre-existing illnessesAny pre-existing illnesses will be excluded
Will also pay out for accidental injuryWill not pay out for injury (only total disability if it’s listed within the policy)
Can’t be added to a life insurance policy but both policies can be taken out simultaneouslyCan be added to a life insurance policy for an additional fee or cover can be taken out as a standalone policy


Income protection will pay out for any illness or injury that prevents you from working for an extended period of time and the policy will pay out in monthly instalments.

Whereas critical illness cover will pay out a lump sum payment if you’re diagnosed with a specific illness that’s listed within your policy.

Typically, 30 illnesses are covered by critical illness cover but cover can be more or less comprehensive depending on the provider - making it essential to compare quotes.

Critical illness cover can also be added to a life insurance policy for an additional fee, meaning both forms of cover are paid for under one premium.

Income protection can’t be added to a life insurance policy but, depending on your budget, it’s possible to take out both policy types at the same time.

We have written a comprehensive article on income protection or critical illness cover you may like to read for greater detail »

Can I cancel an income protection insurance policy?

Yes, most policies come with a 30-day cancellation period.

This means that if you cancel your policy within 30 days of the policy start date, you should receive a full refund.

Cancelling a policy after the first 30 days means you may receive a partial refund or no refund at all.

All providers will have different cancellation terms and conditions, so you may wish to check this before taking out a policy.

While cancelling a policy is possible it should really only be the very last resort.

Your investment could be wasted if you’ve paid premiums into the policy and you’ll no longer be covered once the policy has been ceased.

Is income protection worth it?

Ultimately, whether income protection insurance is worth it for you or not will depend on your personal circumstances.

It can be very beneficial for those with a family, a mortgage or rent, bills or other financial obligations - particularly for self-employed workers who don’t benefit from sick pay from an employer.

An important question you can ask yourself is if you were unable to work for an extended period of time, would you be able to get by on your savings alone?

Income protection insurance can help to provide essential financial support when you need it the most.

Speaking to an expert, like Reassured Advice, can help you to determine whether income protection is right for you or not.

A friendly member of the team can talk through your reasons for needing cover and present you with the most suitable options. Simply get in touch.

Compare income protection insurance quotes

Prices for income protection insurance can vary significantly between providers, highlighting the need to compare multiple quotes.

Reassured Advice can save you time and money by helping you do this.

A friendly member of the team will also be on hand to take you through the application process, answer any questions you may have and decode any jargon.

Quotes a fee free and without obligation. The best part is income protection insurance through Reassured Advice starts from just £5-a-month.

Compare Income Protection with Reassured »

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