Best income protection insurance UK

Finding the best income protection insurance to meet your needs will depend on:

  • What you want to cover
  • Your available budget
  • Your occupation/salary
  • Whether you receive sick pay (or have savings to fall back on)

As each insurer will offer different policy terms and features it’s important to compare multiple quotes to ensure you’re getting the right cover to meet your needs, at a great price.

You could conduct this research yourself or you could enlist the help of an expert broker, like Reassured.

Using the services of Reassured you can compare quotes from the whole of the market to secure the best income protection to meet your needs.

All quotes are personalised, fee-free and completely no-obligation. But, best of all, income protection quotes through Reassured start from just 20p-a-day.

What is the best income protection insurance for me?

The best income protection insurance for you will be the policy that offers the greatest level of cover to help cover your financial commitments, while being at an affordable price.

What is income protection insurance?

Income protection insurance is a policy which can pay out a percentage of your income if you’re unable to work due to illness or injury.

You’ll receive monthly (tax-free) payments until you recover and return to work or until your payment period comes to an end.

These payments could help you keep up with your financial commitments and living costs.

Your policy should:

Benefit Amount

Offer the right level of cover - Insurers offer to pay out a percentage of your income, this percentage could be up to 70% but will vary between providers.

Policy Term

Provide cover for a long enough period - You can choose a policy term to meet your needs but, often, cover will need to cease by the age of 70.

Definition of Incapacity

Have the most comprehensive definition of capacity - This will outline what you can claim for. Most policies come with an ‘own occupation' definition, meaning you can claim if you’re unable to do your own job.

Deferred Period clock

Have a suitable deferred period - The deferred period is the time that must pass before your payments commence. Typical options include 4, 8, 13, 26 and 52 weeks.

Payment Period

Provide payments for a period that suits you - You can opt for a short term (maximum of 1, 2 or 5 years) or long term (until the policy comes to an end) payment period.

Cost Money Quotes

Be at an affordable price - Ultimately, your cover needs to be affordable so you can keep up with the monthly premium payments. Comparing quotes can help you find the right policy at the best available price.

Why not input your monthly financial commitments into our income protection insurance calculator (below) to find out how much cover you may need to help cover your essential costs.

How much income protection insurance do you need?

Enter your monthly financial commitments to understand the level of income protection cover you might require to secure the best income protection insurance for your needs.

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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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Let us find you our best quotes.

Who has the best income protection insurance? [Top 10 insurers]

Below is a list of 10 providers who offer some of the best income protection insurance in the UK:

  1. AIG
  2. Aviva
  3. British Friendly Society
  4. Cirencester Friendly
  5. Holloway Friendly
  6. Legal & General
  7. LV=
  8. Royal London
  9. Shepherds Friendly
  10. The Exeter

This is list is based on these providers being highly rated on Defaqto, with some of their policies scoring a rating of 5 stars (the highest possible rating).

We have compiled a comparison table of these top providers to help you establish the best provider for you:

InsurerMaximum percentage paid outAge restrictionsPolicy termMaximum monthly benefitPayment period optionsDefinition of incapacityDeferred periodPremium type
AIG logo Up to 60%17 - 545 - 53 years
(cover must cease by age 70)
£20,833 per monthLimited term up to 24 months or Full-termOwn occupation, suited occupation or work tasks4, 8, 13, 26 or 52 weeksGuaranteed
aviva logo Up to 65%18 - 59

5 - 52 years
(cover must cease by age 70)

£20,000 per monthLimited term up to 24 months or Full-termOwn occupation4, 8, 13, 26, 52 or 104 weeksGuaranteed or reviewable premiums
British Friendly logo Up to 65%18 - 59Minimum of 5 years
(the term can end anytime you wish but must cease before age 70)
£4,750 per monthLimited term of 1, 2 or 5 years or Full-termOwn occupation4, 8, 13, 26 or 52 weeksLevel or age costed premiums
Cirencester Friendly logo Up to 65%18 - 54No minimum term stated but cover must cease by age 70£52,000 per yearLimited term of 2 years or Full-termOwn occupation or suited occupation1, 4, 8, 13, 26 or 52 weeksGuaranteed or age-based premiums
Holloway Friendly logo Up to 65%18 - 59Minimum of 5 years
(the term can end anytime you wish but must cease before age 70)
£65,000 per yearLimited term of 1 or 2 years or Full-termOwn occupation1, 4, 8, 13, 26 or 52 weeksLevel or age-based premiums
Legal & General logo Up to 60%18 - 59Minimum of 5 years
(the term can end anytime you wish but must cease before age 70)
£20,000 per monthLimited term up to 12 months or Full-termOwn occupation4, 8, 13, 26 or 52 weeksGuaranteed premiums
LV= logo Up to 60%17 - 59Minimum of 5 years
(the term can end anytime you wish but must cease before age 70)
£20,833 per monthLimited term of 12 or 24 months or Full-termOwn occupation1, 2, 3, 6 or 12 monthsGuaranteed or reviewable premiums
Royal London logo Up to 65%18 - 595 - 52 years
(cover must cease by age 70)
£250,000 per yearLimited term of 1, 2 or 5 years or Full-termOwn occupation4, 8, 13, 26 or 52 weeksGuaranteed or age-costed premiums
Shepherds Friendly logo Up to 70%16 - 60Minimum of 5 years
(the term can end anytime you wish but must cease before age 70)
Information not statedLimited term of 1 or 2 years or
Full-term
Own occupation1, 4, 8, 13, 26 or 52 weeksAge-costed and reviewable premiums
The Exeter logo Up to 60%18 - 59No minimum term stated but cover must cease by age 70£10,000 per monthLimited term of 2 or 5 years or Full-termOwn occupationDay 1 or 1, 4, 8, 13, 26 or 52 weeksGuaranteed or age-costed premiums

This information has been taken from each insurers website and is correct as of 17/07/23. While some insurers may offer cover from age 16 or 17, Reassured can only offer cover to those over 18

Hopefully this table has shown how cover can vary between different providers and why comparing quotes is necessary.

By using Reassured you can compare quotes from all of the providers mentioned above, as well as many more.

Their whole of market comparison service can help you find the best income protection for your personal circumstances.

Get in touch today for your free quotes.

Which is best, short-term or long-term income protection?

When choosing between short-term and long-term cover, one isn’t necessarily better than the other.

While both can provide you with financial support, the option that’s best for you will depend on your budget and how long you’d like to receive payments for.

Short-term income protection will pay out for a set period of 1, 2 or 5 years. Whereas long-term income protection could continuously provide payments until you’ve made a full recovery or for the rest of the policy term (if you’re unable to return to work).

Due to paying out for a shorter period, short-term income protection tends to be a more budget friendly option.

However, if you don’t receive sick pay (such as the self-employed) a long term policy could help to provide peace of mind that you can receive some form of income even in the event of long term sickness.

Best short-term income protection

Short-term income protection key points

  • Payment period of 1, 2 or 5 years
  • Often referred to as ‘limited term
  • Could pay out up to 70% of your usual income
  • Premiums are usually cheaper due to the shorter payment period
  • Beneficial for those on a tight budget or those who just want some form of cover
  • Available through Reassured from 20p-a-day

What’s the best short-term income protection?

The best short-term income protection for you will depend on how long you’d like your policy to pay out for per claim.

Most insurers will pay out for a maximum of 1 or 2 years but some will pay out for a maximum of 5 years.

Comparing multiple quotes can help you to find the right short term policy for your needs. Simply get in touch for your free quotes.

Best long-term income protection

Long-term income protection key points

  • Payment period could last until the end of the policy term
  • Often referred to as ‘full term
  • Could pay out up to 70% of your usual income
  • Premiums are usually more expensive due to the longer payment period
  • Beneficial in providing cover for the rest of your working life (if you’re unable to return to work)
  • Available through Reassured from 20p-a-day

What’s the best long-term income protection?

The best long-term income protection will be the policy that can help you cover your key financial commitments at an affordable price.

Why not use Reassured to compare quotes from the whole of the market?

A friendly member of the team can help you find the best available deals.

What’s the best value income protection insurance?

Holloway Friendly offer the most affordable income protection insurance.

This information was gathered by comparing quotes through the whole of market service offered by Reassured.

The table below shows example quotes for Holloway Friendly (through Reassured).

Quotes are based on a non-smoker, in good health, with an annual income of £30,000. Cover is until age 65 with a 3 month (13 week) deferred period and a payment period of 1 year:

AgePremium price per month
20£5.85
25£6.14
30£6.41
35£6.88
40£8.60
45£11.00

50

£14.63


While these quotes help to give an idea of how much you could pay for low-cost income protection, the exact price you pay will vary based on your personal circumstances.

To calculate the price you’ll pay for cover, insurers will take the following information into consideration:

  • Age
  • Health and wellbeing
  • Smoking status
  • Occupation
  • Lifestyle
  • Policy term
  • Payment period
  • Deferred period
  • Definition of incapacity

Comparing quotes can help you find the best value income protection, why not contact Reassured to compare quotes from all major UK providers?

Quotes through Reassured start from just 20p-a-day.

Which income protection provider has the best pay out rate?

We identified the following providers as having some of the best income protection pay out rates:

InsurerPay out rate %
Shepherds Friendly logo 96.2%
Cirencester Friendly logo 95.4%
aviva logo 94.3%
Holloway Friendly logo 93.4%
LV= logo 92.0%
AIG logo 90.0%
The Exeter logo 90.0%
British Friendly logo 90.0%
Legal & General logo 82.2%

This information has been taken directly from each insurer’s most recent pay out statistics and is correct as of 17/07/23

While pay out rates are a good factor to consider, having a high pay out rate doesn’t necessarily make an insurer ‘the best’.

It simply helps to give an indication of how likely an insurer is to pay out when a claim is made.

In an ideal world, all providers would have a 100% pay out rate. However, some claims may not meet the definition of incapacity listed in the policy and there may be instances of non-disclosure.

Pay out rates are just one factor that should be considered when searching for the best income protection. You’ll also want to consider the policy terms that are offered to ensure cover meets your needs.

When comparing income protection using Reassured a friendly member of the team can provide you with quotes from all of the above providers and offer personalised recommendations on what’s right for you.

What’s the best income protection insurance for self-employed?

The best income for self-employed workers will depend on your personal circumstances, such as your occupation, what you’d like to cover and your budget.

As self-employed workers don’t receive sick pay, being unable to work for an extended period could result in a devastating loss of income.

Therefore, having an income protection policy in place could help to provide much needed peace of mind.

Being self-employed you have a number of options available to you, including:

  • A personal income protection plan - Just like any policy discussed in this article. These policies will cover your own income if you’re unable to work
  • An executive income protection policy - These policies can be taken out by limited companies. As a self-employed director of your own limited company, you could choose to cover your own income or the income of any other employee in the business

Reassured can compare both personal and executive income protection policies so you can find the right cover for your needs.

We have a full income protection for self-employed guide if you require more information about protecting your self-employed income »

Compare income protection insurance quotes

To find the best income protection insurance quotes, it’s essential to compare multiple quotes.

Reassured can help you compare quotes from the whole of the market (including the UK’s best insurers and smaller specialists).

A friendly expert can take your personal circumstances into consideration and provide you with the most suitable options.

But, the best news is, you can secure quotes free of charge and without obligation.

Income protection insurance starts from just 20p-a-day through Reassured, so why not get in touch?

Income protection insurance FAQs

How much income protection insurance do I need?

To understand how much income protection insurance you need you can add together your financial commitments.

However, the amount of income protection you can take out will typically be a percentage of your annual income.

Therefore, it may not be enough to cover everything you need it to.

By working out how much cover you need to protect key costs, you can establish if a policy offers the right level of cover for you.

What are the maximum benefits on an income protection insurance policy?

Most commonly, 70% of your usual income is the maximum amount that’s paid out by an income protection policy.

However, this amount can vary between different insurers.

Can I work while receiving income protection insurance?

No, income protection insurance is designed to pay out to you while you’re unable to work to help replace lost income.

Therefore, if you’re still able to earn an income, the policy won’t pay out and you won’t receive your payments.

Is it worth taking out income protection insurance?

If you’re worried about keeping up with financial commitments if you were unable to work, it could be worth securing cover to help provide peace of mind.

Income protection could be particularly beneficial for:

  • Self-employed workers - Or any workers that don’t receive sick pay. An income protection policy could help to provide vital funds while you’re off work
  • Those with a family to support - The payments received from income protection could help you to keep up with your family’s daily living costs
  • Those with a mortgage and/or other debts - Even if you don’t have a family, income protection could help you keep up to date with any monthly payments

Speaking to an expert at Reassured can help you establish whether income protection is right for you, simply get in touch.

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