What is loss of earnings insurance?

Loss of earnings insurance is designed to help replace a percentage of your income while you’re unable to work due to illness or injury.

The monthly, tax-free, payments you receive could help you to keep up to date with your financial commitments and other key costs.

The amount paid out to you will vary between insurers, but most will offer to pay out between 50% - 70% of your usual earnings.

This type of policy is also known as income protection or income protection insurance.

Why not compare income protection through Reassured? A friendly member of the team can provide you with the most suitable quotes and offer recommendations on what’s best for you.

Quotes are fee-free and start from just 20p-a-day.

Can you insure against loss of income?

Yes, it’s possible to get insurance for loss of income. This is a policy which will protect your earnings in the event of illness and injury.

Should you fall ill or sustain an injury that prevents you from working, loss of earnings insurance (or income protection) can allow you to make a claim and receive monthly, tax-free payments.

It’s estimated that UK households spend £2,700 on family living each month[1]. With this in mind, the payments you receive could help you to cover:

  • Rent or mortgage payments
  • Household bills (council tax, electric, water, gas, phone and broadband)
  • Daily living costs (food shop, petrol and/or public transport)
  • Debt or loan payments (credit cards, car finance plans or personal loans)
  • Leisure costs

Speaking to an expert can help you establish the best way to protect your earnings.

Why not contact Reassured for your personalised, fee-free and no-obligation quotes?

Who needs loss of earnings insurance?

Anyone with an income could benefit from having loss of earnings insurance in place.

It could be particularly beneficial if you have a family and/or financial commitments to take care of.

If you’re in employment, would statutory sick pay (SSP) be enough to cover your financial commitments? This is currently £109.40 per week up to 28 weeks[2].

There are also many UK workers who aren’t entitled to sick pay, such as the self-employed.

Loss of earnings insurance could be vital to allow you to carry on with your current standard of living.

Assessing your personal circumstances could help you to establish whether loss of earnings insurance is right for you.

Loss of earnings insurance calculator

Enter your financial commitments and key costs to estimate how much loss of earnings insurance you might need. Simply fill in the fields which apply to you for an instant calculation.

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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 your best quotes.

What does loss of earnings insurance cover?

Loss of earnings insurance covers your income in the event you become too ill or injured to work.

There’s no specified list of conditions, meaning you could be covered for a range of illnesses and injuries.

However, your policy will come with a ‘definition of incapacity’ and this will outline what you can claim for.

Definitions of incapacity include:

  • Own occupation - The most common definition. You will be able to claim if you’re unable to do your own job
  • Suited occupation - If you can’t do your own job, you’ll be required to take on another role which is suited to your skills and experience. If you’re unable to do either, you can claim
  • Any occupation - You must be unable to work in any job in order to make a claim

Why not read this complete what does income protection cover guide for more information »

Loss of earnings insurance terms and conditions

Loss of earnings insurance policies have terms and conditions which can be tailored to best meet your needs.

Below are some important terms you should be aware of:

Terms and conditionsDefinition
Benefit amountAlso referred to as a cover amount. This refers to how much will be paid out to you. Often a percentage of your usual annual income, paid out in monthly (tax-free) payments.
Policy termHow long your cover will last. You can choose a policy term to meet your needs (often from 5 - 52 years with cover needing to cease by the age of 70).
Deferred periodA specified period that must pass before your payments commence. If you’re still unable to work at the end of your deferred period, you’ll start to receive payments. Common deferred periods include 4, 8, 13, 26 and 52 weeks.
Payment periodHow long you’ll receive payments for. This could be on a short-term basis of either 1, 2 or 5 years or a long (full) term basis.
Definition of incapacityWhat makes you eligible to claim on your policy. Options include own occupation, suited occupation and any occupation.


It’s important to be aware of all terms and conditions before you purchase a policy.

When using a broker, you’ll have an expert on hand to decode any jargon and answer any questions you might have.

A friendly member of the Reassured team is ready and waiting to help.

What types of loss of earnings insurance are there?

Most commonly, loss of earnings insurance refers to an income protection policy.

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

Long-term loss of earnings insurance

Long-term income protection

Long-term income protection could continuously pay out until the end of the policy.

This could help you to continue earning an income if you’re unable to return to work.

  • Up to 70% of your income could be protected (depending on the insurer)
  • Premiums tend to be more expensive due to the longer payment period
  • Could be beneficial for those who don’t receive sick pay and need more extensive personal cover
  • Available through Reassured
Short-term loss of earnings insurance

Short-term income protection

Short-term income protection could pay out for up to 1, 2 or 5 years per claim.

This could allow you to make multiple claims throughout the policy lifetime.

  • Up to 70% of your income could be protected (depending on the insurer)
  • Premiums tend to be cheaper due to the shorter payment period
  • Could be beneficial for those who receive sick pay or those on a tight budget to provide some form of cover
  • Available through Reassured

Loss of earnings insurance could also refer to accident, sickness and unemployment insurance (ASU).

This is a budget form of income protection which will pay out on a short-term basis and often doesn’t require full medical underwriting. For this reason, it’s less certain that a policy will pay out. ASU isn’t available through Reassured.

To compare long-term and short-term income protection, contact a friendly expert at Reassured.

Can you get self-employed loss of earnings insurance?

Yes, you can secure loss of earnings insurance for self-employed workers.

This will be a standard policy but with the policy terms and conditions chosen to best suit the needs of those who are self-employed.

For example, you may wish to opt for a shorter deferred period to receive payments as soon as possible and a long-term payment period to receive payments for as long as possible.

If you own a limited company, you also have the option of executive income protection.

This could allow you to cover the income of an employee (including your own). As the premiums are paid for by the business, they could be classed as a business expense (making them tax deductible).

Read our informative income protection for self-employed workers guide for more information on what options are available »

How much does loss of earnings insurance cost?

The price you pay for loss of earnings insurance will vary depending on your personal circumstances.

During the application process you’ll be required to provide key information in order for insurers to calculate the price that you pay.

The information required includes:

Personal details

Policy details

  • Payment period
  • Deferred period
  • Definition of incapacity
  • Policy term
  • Benefit amount

Below are example quotes for loss of earnings insurance (income protection). Quotes are based on a non-smoker, in good health, with an annual income of £30,000.

The policy term is until age 65, with a 3 month (13 week) deferred period and a 1 year payment period:

AgePrice per month
30£5.00
35£5.17
40£6.28
45£8.01
50£10.62


Comparing quotes can help you find the best price on a policy that meets all your needs.

When comparing quotes through Reassured, prices start from just 20p-a-day. Simply get in touch today for your free quotes.

How much can I claim for loss of earnings insurance?

Loss of earnings insurance could pay out up to 70% of your usual earnings (depending on the insurer).

The exact amount that will be paid out to you will depend on your income.

Insurers also often have a maximum benefit amount, meaning no more than the specified amount can be paid out.

For example, with Legal & General this is a maximum of £20,000 per month, while British Friendly have a maximum benefit amount of £4,750 per month.

To find the best income protection for your needs it’s essential to compare quotes.

Conduct a whole of market income protection comparison and receive fee free quotes using the services of Reassured.

How to claim loss of earnings insurance

To claim loss of earnings insurance you’ll need to be too ill or injured to work and your incapacity must meet the definition of incapacity listed within your policy.

Typically, this will be an own occupation definition, which means you must be unable to do your own job.

To make a claim, you’ll need to contact your insurer. It’s likely you’ll be sent a claims form to complete and send back.

You may also be asked to provide proof of your earnings and medical evidence of your illness/injury.

Once your claim as been deemed successful, you’ll need to wait for your deferred period to pass.

If you’re still unable to work once your deferred period has ended, you’ll start to receive your monthly payments.

Is loss of earnings insurance worth it?

Hopefully the information outlined in this guide has helped to inform you on what loss of earnings insurance is and what it can be used for.

Whether loss of earnings insurance is worth it for you will depend on your needs.

If you have financial commitments such as rent, a mortgage, other loans or you have a family to provide for, then loss of earnings insurance could help you to keep up with essential costs while you’re unable to work.

If you’re self-employed or don’t receive full sick pay from your employer then loss of earnings insurance could help to provide vital funds.

Compare loss of earnings insurance quotes

Compare loss of earnings insurance (income protection) through Reassured.

Their whole of market quote comparison service allows you to find the right policy to meet your needs at the best available price.

Not only that but you’ll have an expert on hand to answer your questions and provide advice along the way.

Quotes are personalised, no-obligation and fee-free, so why not get in touch?

Protect your earnings from just 20p-a-day.

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