What is long-term income protection insurance?

Long-term income protection is a form of insurance which will help to replace lost income if you’re unable to work due to accident or sickness.

Long-term income protection insurance differs to short-term income protection, as it can provide you with a longer term payment period (how long you receive payments for).

The amount paid out to you can be up to 70% of your usual annual income and it will be paid out to you in monthly (tax-free) payments.

Depending on your needs you could opt for a payment period that lasts up until you reach retirement. Unlike a short-term income protection policy which will pay out for 1 - 2 years.

This can help you to take care of key financial commitments while you’re unable to work as a result of illness or injury.

Keep reading to find out everything you need to know about long-term income protection, including:

Comparing long-term income protection quotes can allow you to secure the best policy at the most affordable price.

Why not let Reassured advice help you to do this? Their service is FCA-regulated and their quotes are personalised, fee-free and without obligation.

Compare Long-term Income Protection Quotes »

Long term income protection UK [Key points]

Long-term income protection insurance:

  • Can help to replace a percentage of your usual income if you’re unable to work due to illness or injury
  • Doesn’t cover unemployment
  • Policies can pay out between 50% and 70% of your usual income (maximum percentage offered will vary between providers)
  • Payments will be made in monthly (tax-free) instalments
  • Offers longer term cover than short term income protection
  • Can be secured through Reassured Advice from just 20p-a-day ‡

What does long-term income protection cover?

Long-term income protection will cover you for illness and injury. This means you can claim for:

  • Long-term illness that leaves you unable to work
  • Serious injury that prevents you from working

There’s no specific list of illnesses or injuries included with an income protection policy.

The monthly payments you’ll receive also won’t be tied to any specific financial commitment, meaning you can use them however you see fit.

This could be to help cover:

  • Mortgage payments
  • Rental payments
  • Household bills
  • Daily living costs
  • Childcare costs
  • Transportation costs
  • Monthly debt payments (such as credit cards or loans)
  • Leisure costs

You can use your income protection payments to help cover whatever your usual monthly income would be used for - allowing you to continue your current lifestyle with minimal financial disruption.

Find the best long-term income protection policy to meet your needs using the services of Reassured Advice.

How much long-term income protection do you need?

Enter your monthly financial commitments to understand the level of long-term income protection cover you might 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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What doesn’t long-term income protection cover?

There are a few things that won’t be covered within a long term income protection policy. These include:

  • Unemployment (both involuntary and voluntary)
  • Pre-existing medical conditions
  • Self-inflicted injuries or illnesses
  • Illness/injury as a result of drug or alcohol misuse
  • Death (although some providers may pay out a small sum of money to loved ones if you pass away while your policy is active)

Talking to an expert, such as Reassured Advice, can help you to understand the full terms and conditions of your policy so you know the cover you’re taking out is right for you.

Simply get in touch.

Do I need long-term income protection?

Whether you need long-term income protection will likely depend on your personal circumstances.

Those who would struggle to find the funds to cover their day-to-day living costs and financial commitments while unable to work for a prolonged period of time will benefit the most from long-term income protection.

In particular you may need long-term income protection if you:

  • Are self-employed
  • Are a freelance worker
  • Don’t receive full sick pay
  • Don’t have your own savings

Having a long-term income protection in place can provide you with essential financial support when you need it the most (particularly if you don’t receive any other financial aid, such as sick pay).

As you can choose for your payment period to last up until retirement age, you can be protected for the rest of your working life (if your incapacity means you can’t return to work).

For those who are on a strict budget, or have other sources of income available to them, a short term policy may suffice.

Talking through your needs with an expert is the best way to gain all the information you need. Reassured Advice can provide you with the necessary information as well as help you to compare quotes.

Let Reassured Advice help you find your ideal income protection policy.

How does long-term income protection work?

Long-term income protection works by paying out a percentage of your income (typically up to 70%) if you become unable to work as a result of serious illness or injury.

You’ll receive these payments until you’re able to return to work, until your policy expires, until your payment period comes to an end or until you retire (whichever happens first).

Typically, long-term policies can cover you for a minimum of 5 years up until you reach retirement.

Unlike other forms of protection, you won’t receive payments straight away. Instead, you’ll need to wait until your deferred (or waiting) period has come to an end.

The deferred period refers to the period of time you must be unable to work for before your payments will begin. Your payments will only begin if you’re still unable to work once your deferred period has come to an end.

For example, if you select an 8 week deferred period and you’re still unable to work after 8 weeks has passed, your payments will commence.

It can also be possible to make multiple claims throughout the lifetime of your long-term income protection policy.

What’s the best long-term income protection?

The best long-term income protection for you will be the policy that meets your needs and is at a price that’s within your budget.

When taking out income protection, there are a range of policy details you can select to ensure your policy best meet your needs.

These include:

Deferred period

The deferred period refers to how long you must be unable to work for before your payments will begin.

Payments will only commence if you’re still unable to work once your deferred period has come to end.

Typically, deferred periods can range from 4 weeks to 52 weeks (but this can vary between providers).

How long your deferred period should be will depend on your personal circumstances.

For example, if you receive sick pay, you could choose a deferred period that will end once you’ve stopped receiving sick pay.

Definition of incapacity

This will define the circumstances in which you can make a claim on your policy. Typically, there are three definitions:

  1. Own occupation - Will allow you to claim if you’re unable to do your specific job role. This is the most comprehensive definition
  2. Suited tasks - If you’re unable to do your own job you may be asked to do another job that’s suited to your skills and experience instead. If you can’t do either, you’ll be able to claim
  3. Any occupation - You’ll only be able to claim if you’re unable to work at any job

Payment period

The payment period is the period of time in which you’ll receive your income protection payments.

This could be as little as 5 years or could last up until you reach retirement age (if your conditions leaves you unable to work again).

Again, how long you’d like your policy to pay out for will depend on your personal needs.

Those who don’t have access to other forms of finance may choose a longer payment period to avoid having to dip into their own savings.

Premium payment

This will outline how you pay for your policy. Common premium payment types include:

  • Guaranteed - These are premiums that remain fixed throughout the lifetime of your policy
  • Reviewable - These are premiums that will change over time (this could be for a variety of factors such as age or risk)
  • Age-banded - These are premiums that will increase each year as you age (usually at a guaranteed rate)

A friendly member of the Reassured Advice team will be happy to talk you through each step of the application process, so you have confidence that your policy is set up to best meet your needs.

Simply get in touch with Reassured Advice.

Compare Income Protection » Find Your Best Quote

What’s the cost of long-term income protection?

Long-term income protection can be taken out through Reassured advice from just 20p-a-day.

However, the exact price you pay will depend on your personal circumstances and your policy details.

Information taken into consideration when calculating your premium includes:

  • Age
  • Occupation
  • Smoking status
  • Medical history
  • Policy length
  • Length of deferred period
  • Length of payment period
  • Definition of incapacity
  • Premium payment type

For more information read our income protection insurance calculator article »

The table below shows some example quotes.

These quotes are based on a non-smoker, in good health, with an annual income of £30,000. Cover is up to age 65 with a 3 month deferred period and with a maximum benefit amount:

AgePrice per monthMonthly benefitDefinition of incapacityPayment periodPremium payment type
25£10.17£1,500Own occupation40 yearsReviewable - age banded
30£12.04£1,500Own occupation35 yearsReviewable - age banded
35£14.98£1,500Own occupation30 yearsReviewable - age banded
40£19.56£1,500Own occupation25 yearsReviewable - age banded
45£28.94£1,500Own occupation20 yearsReviewable - age banded
50£43.74£1,500Own occupation15 yearsReviewable - age banded


Contact Reassured Advice to compare quotes from the whole of the market to find the most affordable policy for your personal circumstances.

Quotes are personalised, fee-free and no-obligation.

How much does long-term income protection pay out?

A long-term income protection policy can pay out up to 70% of your usual annual income in monthly payments.

The exact amount that’s paid out to you will depend on your personal circumstances and the terms and conditions of your chosen policy.

Reassured Advice work with providers who pay out up to 70% of your usual income, why not get in touch to compare quotes to find the right policy to meet your needs?

How long does long-term income protection pay out for?

A long-term income protection policy has the potential to pay out to you until you reach retirement age (if you specify this length during the application process and in cases where your condition means you can't work again).

An income protection policy will continue to pay out to you until one of the following happens (whichever happens first):

  • Your policy comes to an end
  • Your payment period comes to an end
  • You recover and return to work
  • You reach retirement

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

Both long-term and short-term income protection will pay out up to 70% of your usual income to help you replace lost earnings while you’re unable to work due to sickness or accident.

However, there are some differences between the two.

The main differences are the length of time you can have the policy pay out to you (the payment period) and how much your cover will cost.

Due to providing cover for a longer period, long-term income protection tends to be priced higher than short-term income protection.

The table below shows a price comparison between the two policy types.

Quotes are based on a non-smoker, in good health, with an annual income of £30,000. Cover is up to age 65 with a 3 month deferred period and a maximum benefit amount:

AgeLong-term price per month (benefit amount £1,500)Short-term price per month (benefit amount £1,625)
25£10.17
(40 year payment period)		£6.14
(1 year payment period)
30£12.04
(35 year payment period)		£6.41
(1 year payment period)
35£14.98
(30 year payment period)		£6.88
(1 year payment period)
40£19.56
(25 year payment period)		£8.60
(1 year payment period)
45£28.94
(20 year payment period)		£11.00
(1 year payment period)
50£43.74
(15 year payment period)		£14.63
(1 year payment period)


Reassured can help you to compare both long-term and short-term income protection so you can find the right policy at the best price.

Long-term income protection vs critical illness cover

Another option that can help to replace lost income during a period of ill health is critical illness cover.

Critical illness cover can be added to a life insurance policy for an additional cost or taken out as a standalone policy.

Rather than paying out in monthly payments, like an income protection policy, a critical illness cover policy will pay out one lump sum payment if you’re diagnosed with a serious illness and unable to work.

You’ll also be able to choose a cover amount instead of having your cover amount be a percentage of your income.

What option is best for you will depend on your personal circumstances. While the two are similar, there are some key differences:

Income protectionCritical illness cover
Can help you to replace lost incomeCan help to replace lost income
Covers you for sickness and accidentCovers you for serious illness
Will pay out to you in monthly paymentsWill pay out to you in one lump sum payment
Can easily be budgeted to meet monthly financial obligationsCould potentially be stressful to budget a large sum of money over a long period of time
Cover amount not guaranteed to meet all financial commitmentsLump sum could help to cover more expensive financial commitments
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 cost
No specific set of illnesses/injuries listed within the policySpecific set of illnesses will be listed within the policy
Can be taken out from 20p-a-day through Reassured AdviceCan be taken out from 33p-a-day º through Reassured

Compare long-term income protection quotes

Comparing quotes can help you to secure the best long-term income protection policy to meet your needs.

Reassured Advice help you to do this by providing you with free, personalised and no-obligation quotes.

A friendly member of the team can help you compare quotes from the whole of the market so you can find the right policy at the best available price.

What’s more, income protection through Reassured Advice starts from just 20p-a-day.

Compare Long-term Income Protection Quotes »

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