Income protection

Key questions

• What is income protection insurance, and how does it work in the UK?
• How much income protection do I need?
• How much does income protection cost in the UK?
• Income protection deferred periods explained: how long before it pays
• Do income protection policies pay out?
• Short-term vs long-term income protection: what’s the difference?

Topics in this section

Everything in income protection

• 
  What is income protection insurance, and how does it work in the UK?

  Income protection pays a regular monthly income if illness or injury stops you working. You pay a monthly premium; payments start after a waiting period…

• 
  How much income protection do I need?

  Add up the monthly outgoings that would continue if your income stopped — housing, utilities, food, debts, dependants. Then subtract employer sick pay, Statutory Sick…

• 
  How much does income protection cost in the UK?

  There is no single honest figure: premiums depend on your age, occupation class, health, smoking status, the monthly benefit, the deferred period, the benefit period…

• 
  Income protection deferred periods explained: how long before it pays

  The deferred period is the waiting time between stopping work and the first payment — you choose it at application, commonly from four weeks to…

• 
  Own occupation, suited occupation and any occupation definitions

  The incapacity definition sets the test a claim must pass. “Own occupation” pays when you cannot do your specific job — the strongest definition. “Suited…

• 
  Short-term vs long-term income protection: what’s the difference?

  Short-term income protection pays for a limited period per claim — typically one, two or five years — at a lower premium. Long-term income protection…

• 
  Income protection for the self-employed: how it works

  For the self-employed there is no employer sick pay and no Statutory Sick Pay, so income protection is often the only income backstop beyond savings…

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  Income protection, statutory sick pay and benefits: how they fit together

  Employer sick pay comes first, then Statutory Sick Pay at £123.25 a week for up to 28 weeks, then state benefits such as Universal Credit…

• 
  Income protection and pre-existing conditions

  At application the insurer asks health and lifestyle questions; your legal duty is to take reasonable care to answer accurately. Depending on the condition, the…

• 
  Do income protection policies pay out?

  Yes. ABI and GRiD data shows 97.9 per cent of individual protection claims were paid in 2024 and again in 2025. Income-protection-specific rates are not…

• 
  Is income protection worth it?

  Income protection is worth it if losing your earnings for months would put your home or family at risk and sick pay, savings or employer…

• 
  Does income protection cover redundancy?

  No. Income protection pays when illness or injury stops you working, not when you lose your job. An existing claim may continue after redundancy if…

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  Is income protection tax deductible?

  It depends who pays. Personal policies get no tax relief on premiums, but benefits are generally tax-free. Sole traders usually cannot claim premiums as a…

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