How income protection works, what it pays and when, and what it costs.
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 you choose and can continue for years. The incapacity definition in the policy — not the name of your condition — decides whether a claim is paid.
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 Pay, savings you would commit and any existing cover. The gap, subject to the insurer’s cap as a percentage of your earnings, is the benefit worth quoting for.
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 and whether premiums are guaranteed or reviewable. Any “average premium” without a named source and date cannot predict your quote. Fix a specification, then compare written like-for-like quotes.
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 a year. Payments start only after you have been continuously unable to work for the whole period. A longer wait cuts the premium but leaves a gap your sick pay and savings must fill.
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 occupation” adds jobs matching your skills; “any occupation” pays only if you cannot work at all. Two identical-looking policies can differ entirely on this clause.
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 keeps paying until you recover or the policy ends, often at retirement age. The benefit period, not the monthly amount, is the real difference between them.
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 and state benefits. Policies work the same way, but proving earnings matters more, and a short deferred period usually matters more than a large benefit.
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 and ESA. Income protection is designed to start as those layers end. The deferred period should match your sick pay so you never rely on two layers at once.
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 insurer may offer standard terms, exclude that condition, load the premium, or decline. Anything already present is not covered going forward if it is excluded or undisclosed.
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 currently published on an accessible primary page, so we do not quote one. Published Ombudsman decisions show declines usually trace to the incapacity definition, the deferred period or non-disclosure.