What does an income protection policy cover?

Income protection can pay out up to 70% of your usual income and will cover you in the event you:

  • Develop an illness that leaves you too ill to work
  • Become too injured to work as a result of an accident


The monthly (tax-free) instalments you receive can be used to help you cover:

  • Mortgage or rental payments
  • Household bills (gas, electric, water etc)
  • Childcare costs
  • Transportation (petrol, train or bus fair etc)
  • Credit card bills
  • Loan payments (car finance or any other financed goods you have)
  • Other essential daily living costs
  • Leisure expenses (gym membership, Spotify/Netflix/amazon membership etc)

Income protection payments aren’t tied to a specific financial commitment, so you can use them to cover whatever your usual monthly income would pay for.

Reassured Advice can help you find the right cover to protect your income by comparing income protection quotes from all of the UK’s best providers, as well as smaller specialists.

Why not get in touch today for your free quotes?

How much income protection insurance do you need?

Enter your monthly financial commitments to understand 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 long will income protection cover me for?

How long your income protection policy will cover you will depend on the details of your policy.

Firstly, you’ll need to establish if short-term or long-term income protection is the right option for you, as this will dictate how long you can receive payments for.

Short-term - Short-term policies tend to have a maximum pay out period of up to 2 years. This means you can only receive payments for a maximum of 2 years (although this can vary between providers).

Long-term - Long-term policies offer more comprehensive cover as you have the ability to have your payment period last until retirement, meaning you could receive payments for the rest of your working life.

Once you’ve chosen a short or long-term policy, your payment period will be outlined in your policy. This is the length of time you’ll receive your payments for.

Once you start to receive your payments, you’ll receive them until one of the following happens:

  • The payment period outlined in your policy comes to an end
  • You’re able to return to work
  • Your policy expires
  • You retire

Why not let Reassured Advice compare both short and long-term policies on your behalf to help you find the best income protection solution to meet your needs.

Does income protection cover redundancy?

No, income protection doesn’t offer cover in the event of any type of unemployment, including redundancy.

Income protection will only pay out if you become unable to work due to accident or sickness.

If looking for cover to protect you against redundancy, there are other short-term financial protection policies you can take out such as Accident, Sickness and Unemployment.

This policy typically provides cover for up to 2 years and allows you to make a claim in the event you become too ill or injured to work or lose your job involuntarily.

However, please note that due to the Coronavirus pandemic most providers have ceased offering any unemployment cover to new applicants.

Accident, Sickness and Unemployment isn’t something that’s currently offered by Reassured or Reassured Advice.

Will income protection pay out if I die?

No, income protection will only cover a proportion of your income if you become too ill or injured to work.

Your loved ones won’t be able to make a claim on your income protection policy if you pass away.

However, a separate family life insurance policy can pay out to your loved ones if you pass away during the policy term.

This could be in the form of a traditional life insurance policy (such as term or whole of life insurance) which will pay out a lump sum to your loved ones.

Alternatively, there’s family income benefit which will provide your loved ones with monthly (tax-free) instalments (similar to income protection).

This is ideal for long-term family planning as it means your loved ones don’t have to budget a large sum of money at an already stressful time.

A life insurance pay out can help your loved ones to:

  • Maintain mortgage payments or rental payments
  • Cover expensive funeral costs
  • Take care of future family living costs
  • Cover any additional childcare costs
  • Fund daily living costs

Life insurance through Reassured starts from as little as 20p-a-day.

Why not contact Reassured Advice to compare both income protection and life insurance quotes to find your ideal solution?

What does income protection not cover?

While income protection can cover a wide range of illnesses and injuries (as there’s no specific list, as with some other forms of cover) there are some things that won’t be covered.

Things not covered by an income protection policy include:

  • Unemployment (this includes redundancy)
  • Pre-existing medical conditions (these are conditions that a present at the point of application)
  • Any illness or injury that occurs as a result of drug or alcohol misuse
  • Any self-inflicted illnesses or injuries

To find out exactly what you’ll be covered for you can speak to the team at Reassured Advice.

A friendly member of the team can answer any questions you might have and take you through all of your options.

Can you work while on income protection?

No, you won’t be able to make a claim on your policy unless you’re unable to work.

In order to make a claim, you must meet the level of incapacity that’s defined in your policy.

In regards to income protection, incapacity refers to the inability to work due to illness or injury and will be defined in one of the following ways:

Own occupation - This will allow you to make a claim and receive your payments if you’re unable to fulfil the day-to-day tasks of your occupation. Unlike other definitions of incapacity, you won’t be asked to carry out a different job role and, for this reason, this definition offers the most comprehensive cover.

Suited tasks - With this definition of incapacity you’ll only be able to make a claim if you can’t fulfil your specific tasks or any other job with tasks that suit your skills and experience. This means you may be asked to perform a job that’s different to your usual if you are capable of doing so.

Any occupation - Often this definition requires almost total disability for a claim to be successful as you’ll only be able to claim if you can’t carry out any work at all, including simple tasks such as signing your name.

As income protection is designed to replace lost income, if you’re still able to earn the income that’s protected, it’s unlikely that your claim will be accepted.

Is income protection paid monthly?

Yes, once your claim has been accepted, and your deferred (or waiting) period^ has passed, your policy will pay out to you in monthly (tax-free) instalments.

This is to help mimic the monthly income you would usually receive from working and will allow you to keep up with any financial commitments you have.

Your monthly income payments will then continue until one of the following events occurs:

  • The payment period listed within your policy comes to an end
  • You make a recovery and can return to work
  • Your policy term comes to an end
  • You retire

You’ll also be required to pay for your cover in monthly instalments, these are known as premium payments.

You’ll need to keep up to date with these payments to keep your cover valid and to make a successful claim.

To find out more about income protection why not speak to the team of experts at Reassured Advice?

^The deferred period refers to the period of time before your payments begin and is chosen at the point of application. You can learn more about the deferred period in this comprehensive guide.

Do you get taxed on income protection payments?

No, income protection payments are tax-free.

This is why providers only pay out a certain percentage of your income, rather than the total amount.

Income protection through Reassured advice starts from just 20p-a-day*, why not just in touch for your fee-free, personalised quotes.

Which kind of income protection do I need?

What type of income protection you need will depend on your own personal circumstances and your available budget.

As everyone has different requirements when taking out cover, no two quotes will be the same.

Short-term income protection can be a good option for those:

  • On a budget - Due to the shorter pay out period, short-term income protection tends to be cheaper than long-term so those on a budget can benefit from a cheaper premium but still have some cover in place to protect their income
  • Who have other forms of financial protection in place - If you have other forms of protection in place, such as a life insurance policy with critical illness cover, you may not need such comprehensive cover so a short-term policy may suffice in providing an additional safety net
  • Who have their own savings - If you have your own personal funds to fall back on, you may wish to take out some short-term cover to help cover your essential expenses so that you don’t have to use up all of your available savings

Whereas long-term income protection can be ideal for those:

  • Who’re self-employed - As a self-employed worker, you won’t benefit from sick pay from an employer. For this reason, you’re likely to benefit more from longer-term cover as you have the opportunity to be covered for your entire working life (rather than just a few years with short-term)
  • Who don’t have personal savings – if you don’t have a sum of savings to fall back on, having long term cover in place will help to minimise the chances of you needing to self-fund
  • Those who don’t receive sick pay - Similarly to self-employed workers, if you don’t receive sick pay from your employer, income protection can help to financially support you. By taking out longer-term cover you’ll be more comprehensively covered

If you need help establishing what the best option for you is, why not contact Reassured Advice?

The team will take your unique circumstances into consideration and present you with the most suitable options.

How can I get income protection cover?

Securing an income protection policy doesn’t need to be a tricky endeavour, you can secure a policy by:

  • Going direct to any provider - By going direct to a provider it’s unlikely you’ll secure the best deal, as you won’t be able to compare other available options
  • Using a comparison site - While using a comparison site will allow you to compare multiple quotes, you won’t benefit from personalised service and it can be hard to ask questions if you need help throughout the application process
  • Using an insurance broker (like Reassured Advice) - By using a broker service you’ll benefit from help and guidance throughout the whole process, as well as an experienced team comparing quotes on your behalf

Reassured Advice are committed to finding you the best policy at a price that’s within your budget, why not get in touch today?

Compare income protection quotes

To make sure you get the most comprehensive cover at the right price, get in touch with Reassured Advice.

The team of experts can compare quotes from the whole of the market on your behalf, helping to save you time and money.

From the application process to providing you with the most suitable options, a friendly member of the team will be on hand to answer any questions you may have.

The best part is quotes are personalised and fee-free.

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

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