What is short-term income protection?

Short-term income protection (STIP) can help to replace a percentage of your lost income if you become unable to work due to an accident or sickness.

You’ll receive monthly, tax-free income payments that can help to cover the following financial commitments while you’re off work:

  • Family living costs
  • Mortgage/rental payments
  • Bills and utilities
  • Childcare costs
  • Debts (such as loans or credit cards)
  • Other daily living expenses

But how does short-term income protection differ from long-term income protection and which is the best option? Keep reading to find out…

Reassured Advice can compare both short-term and long-term income protection quotes on your behalf to help you find the most suitable solution.

Why not get in contact for your free and no-obligation quotes?

Compare Short-Term Income Protection Quotes »

Short-term income protection key points:

  • Financial protection if you’re unable to work due to an accident or sickness
  • Typically pays out from 50 - 70% of your net income or gross salary
  • Pays out for a short period of time, usually up to 1 -2 years depending on the provider
  • Provides monthly, tax-free payments
  • Payments will continue until you return to work until the payment period outlined in your policy comes to an end or until your policy expires (whichever happens first)
  • Payments will begin after your deferred/waiting period has passed, this is the time in between your first sick day and the day your payments commence

What does short-term income protection cover?

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Protects against illness Pre-existing medical conditions
Protects against injury due to accident Illness or injury because of alcohol or drug abuse
  Self-inflicted injury
  Voluntary redundancy/job dismissal


Short-term income protection will cover you for accidents and sickness.

Unlike other forms of cover, there isn’t a specific set of illnesses listed within your policy, so you’ll be able to make a claim for any illness that prevents you from working for a prolonged period of time.

You’ll also be able to claim for injuries sustained from an accident, regardless of whether the accident happened at work or not.

Are there any exclusions?

There may be some exclusions written into a short-term income protection policy. These can include (but are not limited to):

How much short-term income protection do you need?

Enter your monthly financial commitments to understand the level of short-term 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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Let us find your best quotes.

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Types of short-term income protection

Short-term income protection will cover a loss of income due to accident and sickness. This means you can make a claim in the event of:

  • A period of illness that prevents you from working
  • An injury that leaves you unable to work

The type of policy you have will be based on the level of incapacity you’d like to be covered for.

You have the option to choose between the following definitions:

Own occupation
Offers the highest level of cover as you’ll be able to make a claim if your illness or injury prevents you from carrying out your specific job. For example, if you’re a delivery driver and break your leg and can’t drive, you’ll be able to make a claim.

Suited tasks
You’ll be able to make a claim if you’re unable to complete your specific job or any other job that’s suited to your skills and experience. This means that if there is another role that you can carry out during your period of illness or injury, you won’t be able to make a claim.

Any occupation
Offers the lowest level of cover as you’ll only be able to claim if you can’t complete your specific job or any other job. In most cases, you’ll need to be completely unfit to work. Due to this definition of incapacity, it can be hard for a successful claim to be made.

Reassured Advice can provide full income protection solutions as well as budget-friendly options.

Simply get in touch to compare quotes from the UK’s leading providers, as well as smaller specialist companies.

Short-term income protection cost

It’s possible to secure short-term income protection through Reassured Advice from just £5 a month.

The table below shows the monthly sum assured you can secure for a premium of £5 a month. These quotes are based on a policy with cover up to age 65 with a 3-month deferred period.

Age Monthly sum assured
30 £2,110
35 £1,867
40 £1,750
45 £1,209
50 £858


However, the exact cost you’ll pay will be calculated using your personal circumstances.

There are many factors that can influence the price you pay for your premium, such as:

  • Personal factors - Insurers will need to know your age, medical history and smoking status to get a better idea of the level of risk you pose.
  • Occupation - Occupations are typically split into class groups and premiums will vary between these groups. Less risky occupations (such as professionals, managers and administrators) tend to be in lower-class groups and may pay less. Those with more manual professions (such as those in the building industry) tend to be in higher-risk groups and may pay more. Class groups can vary significantly between providers. For example, Royal London has 11 class groups, whereas Legal & General only have 4
  • Policy type - When taking out short-term income protection, it’s likely you’ll experience cheaper premiums than with a long term income protection policy due to the shorter pay out period
  • Premium type - Income protection can be taken out with reviewable, age banded or guaranteed premiums. Which premium type you choose will influence how much you pay. Keep reading to find out more about these premium payment types…

This highlights the need to compare multiple quotes to find the insurer who’ll offer you the most favourable terms.

Reassured Advice can do this on your behalf to save you time and money.

Short-term income protection premiums

There are a range of premium payment options to choose from, this can also have an influence on how much you pay.

Short-term premium payment options include:

  • Reviewable - Your insurer has the right to change the monthly premiums over time. These changes can be based on factors such as your age or level of risk. For example, as you get older or if your health starts to deteriorate. This means you may end up paying more per month than you originally set out
  • Age banded - Your premium increases each year as you get older at a guaranteed rate. While this can be expensive in the long run, you typically won’t experience loaded premiums if you smoke or have a risky occupation
  • Guaranteed - Your premiums will stay the same throughout the lifetime of your policy, so you’ll never have to pay more for your premiums

Reassured Advice can provide short-term income protection solutions with reviewable, age banded and guaranteed premiums.

Why not speak to a friendly member of the team to gather all the information you need about these premium types?

Short-term income protection redundancy

Typically, short-term income protection won’t cover you for any type of unemployment.

You’ll only be able to make a claim if you’re too ill or injured to work.

However, there are some short-term protection options that can provide unemployment cover, such as Accident, Sickness and Unemployment (ASU).

This is a budget form of insurance cover that allows you to make a claim if you can’t work due to an accident or sickness or if you lose your job as a result of redundancy.

However, due to the current COVID-19 pandemic, some providers have temporarily ceased providing any unemployment cover to new applicants.

If you’re currently out of work due to unemployment, there are government benefits and schemes you can sign up for.

Can short-term income protection cover a mortgage?

Yes, you can use short-term income protection payments to protect your mortgage.

Income protection payments aren’t tied to a specific commitment, so it’s possible to use them to help you continue making mortgage payments while you’re unable to work.

However, depending on how much you receive in income protection payments, it might not cover the full cost of your monthly mortgage payment (especially if you have other financial commitments to cover).

Alternatively, you could take out mortgage payment protection insurance (MMPI). This is a form of cover specifically designed to cover mortgage payments. However, this isn’t something we currently offer at Reassured Advice.

Or you could take out a life insurance policy with critical illness cover. In the event you’re diagnosed with a serious illness (listed within the policy) you can make a claim and receive a lump sum pay out.

Depending on your remaining mortgage balance and cover amount, this lump sum could be budgeted monthly or be used to pay off your mortgage in full.

We have written a dedicated mortgage income protection article if you require more information »

Why not get in touch with Reassured Advice to find the best option to protect your mortgage?

How much will short-term income protection pay out?

Short-term income protection will typically pay out between 50 - 70% of your usual gross annual income.

For example, if your gross salary or net income is £50,000 and you have a policy that pays out at 60% for 12 months, you could receive £2,500 each month (£30,000 over the lifetime of your policy).

However, exactly how much is paid out to you will depend on the provider and the terms and conditions of your policy.

Why not compare short-term income protection from all of the UK’s leading providers to find the best policy at the best price? Simply get in touch with Reassured Advice.

Compare Short-Term Income Protection Quotes »

When will short-term income protection pay out?

You’ll start to receive your short-term income protection payments once your deferred period has passed.

Your deferred period is the length of time you have to be unable to work before your policy starts to pay out.

You choose how long you wish your preferred period to be at the point of application, although options can vary depending on the provider.

How long you wish your deferred period to be will typically depend on your personal needs.

For example, if you benefit from full sick pay or have personal savings, you may be able to rely on these for some time before you require your payments to commence.

However, if you don’t receive full sick pay or don’t have personal savings, you may require your payments to begin sooner.

Short-term income protection claims

Upon the diagnosis of an illness or after an accident has taken place that has left you injured and unable to work, you can make a claim on your policy.

You may be asked to provide medical evidence from your GP or a medical professional to support your claim.

You may also be asked to fill out a claims form to send back to the insurer.

Once your provider has all the correct information your claim will be assessed.

Once your claim has been accepted you’ll need to wait for your deferred period to come to an end before you start to receive your payments.

Short-term vs long-term income protection

While both short-term and long-term income protection provide financial support should you become unable to work due to accident or sickness, there are some key differences. Including:

Short-term Long-term
Short payment period (up to 2 years depending on the provider) Long payment period (can continue to pay out for the remainder of the policy term, which could be all the way up to retirement)
Some policies allow unemployment cover to be added No option to add unemployment cover
Cheaper premiums due to shorter pay out period Premiums are more expensive due to longer pay out period


The main difference is how long you’ll receive your payments.

With short-term income protection, it’s possible for your payment period to last for up to 2 years (although this can vary depending on the provider), whereas long-term income protection can offer a much longer payment period - even up until you retire.

As you’ll receive payments for a much longer period of time, long-term income protection comes with a higher monthly premium.

If you’re on a budget, short-term income protection can be beneficial in helping you cover your expenses if you’re temporarily unable to work.

However, the level of cover provided may not be sufficient if you were to fall more seriously ill.

The right policy for you will depend on what you want to cover and what suits your budget.

Why not use the Reassured Advice broker service to compare both short and long-term income protection to find the best solution for you?

Do I need short-term income protection?

Whether you need short-term income protection will largely depend on your own personal circumstances.

Short-term income protection can be beneficial to those:

  • With a mortgage
  • Who’re self-employed
  • With dependants who rely on them financially
  • Who don’t receive sick pay from an employer
  • Who don’t have savings

Those with a family and/or financial commitments, such as a mortgage, may benefit from having short-term income protection in place to help cover your expenses if you were unable to work.

While you won’t receive your full salary, the percentage paid out to you can be extremely useful in helping you maintain your daily living costs and means you may not have to dip into your personal funds.

While short-term income protection can be beneficial to self-employed workers, you may want to protect your finances with a more long-term solution to ensure you’re protected for your whole working life.

Read our comprehensive article on income protection for self-employed workers »

You may not need short-term income protection if:

  • You receive full sick pay as an employee benefit
  • You have a large amount of savings
  • You have other forms of financial protection in place

Comparing your current outgoings and expenses with your available forms of finance may help you to work out what financial protection best suits you.

Alternatively, you could contact a friendly member of the Reassured Advice team who can provide information about all the options that are available.

Compare short-term income protection quotes

By comparing quotes you can secure the best deal on a policy that meets all of your needs.

Why not enlist the help of an expert, like Reassured Advice, to do this on your behalf?

Reassured Advice can compare short-term (and long-term) income protection quotes from the whole of the market, helping you to save time and money.

They can also be on hand to answer any questions you might have.

The best part is you can secure short-term income protection from just 20p-a-day.

Simply get in touch for your free, no-obligation quotes.

Compare Income Protection » Find Your Best Quotes

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