The Health Guide

Income protection

Do income protection policies pay out?

The short answer

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 Income-protection-specific rates are not currently published on an accessible primary page, so we do not quote one.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.

Written by Ilana Eldad. Reviewed by Emma Leadbetter.

Published . Last reviewed . Next review due .

What to know about whether income protection policies pay out

  1. ABI and GRiD data shows 97.9% of individual protection claims were paid in both 2024 and 2025. Read more
  2. No income-protection-specific acceptance rate is published on an accessible primary page. Read more
  3. Published Ombudsman decisions show declines usually trace to the incapacity definition or the deferred period. Read more
  4. Claims succeed or fail on documents: the definition, the deferred period and the medical evidence. Read more

Thinking about whether income protection policies pay out

What works well

  • 97.9% of individual protection claims were paid in 2024 and 2025.
  • Decline reasons are visible in published Ombudsman decisions.
  • The Ombudsman route is free and binding on the insurer.

What to watch

  • IP-specific acceptance rates are not published openly.
  • A claim can fail on the deferred period alone.
  • Keeping documents is what wins disputes years later.

What the published evidence shows

The headline statistics are strong: protection insurers paid a record £8 billion in 2024 — the equivalent of £21.9 million every day — with 97.9 per cent of individual claims paid, a level repeated in 2025 when £7.84 billion was paid. Within that, the ABI reported a record £209 million paid on individual income protection claims in 2025 at an average claim of £10,700 (source 7). No income-protection-specific acceptance rate is published on an accessible primary page, so this guide does not quote one. What is verifiable is how disputes actually end, because the Financial Ombudsman Service publishes its decisions. Read across the income protection casework, the same structures recur: a claim declined where medical evidence did not support the policy’s incapacity definition; a claim failing because the absence did not span the deferred period or an exclusion applied; continuing benefit stopped — and then ordered reinstated with interest — where the insurer’s evidence did not justify the termination; and claims handling criticised with compensation awarded even where the decline itself was fair. The practical lesson is that claims succeed or fail on documents: the definition, the deferred period, the application answers and the medical evidence.

If you are weighing up a policy, read two or three published Ombudsman decisions on income protection — they show the exact clauses that decide real claims, in plain language, free of charge. Whatever the specifics of whether income protection policies pay out, the discipline that protects you is always the same: get the insurer’s position in writing, keep the documents with the policy, and make sure the people who would help you claim know the policy exists and where the paperwork lives.

If something goes wrong

If a claim is declined, delayed, or continuing benefit is stopped, complain to the insurer first, in writing, and ask two precise questions: which clause of the policy wording the decision rests on, and exactly which evidence failed the incapacity definition or the deferred-period requirement. The insurer must investigate and give a final response. If you are still unhappy after that response — or after eight weeks — the Financial Ombudsman Service can decide the dispute free of charge, and its published income protection decisions show it requiring insurers to restart benefit and add interest where a termination was not justified by the evidence. [1][4] If the insurer itself fails financially, the Financial Services Compensation Scheme may protect eligible policyholders. For the wider regulatory picture, read who regulates insurance in the UK.

  1. Read the IPID before you buy The Insurance Product Information Document summarises what is and is not covered; the full wording governs.
  2. Check the incapacity definition first Own occupation is the strongest definition for the policyholder; suited and any occupation make claims harder.
  3. Match the deferred period to your sick pay The deferred period should end when your employer sick pay and savings would run out — no sooner.
  4. Document your income accurately The benefit is capped as a percentage of earnings; overstated income at application unravels at claim.
  5. Answer health questions with reasonable care Ask for clarification in writing if a question is ambiguous; keep a copy of your answers.
  6. Keep every document Dates, fit notes, reference numbers and written decisions are what resolve disputes later.

Related guides

Common questions

What do the published pay-out figures actually cover?
The figures are market-wide across individual life, income protection and critical illness policies combined, not an income-protection-specific acceptance rate: ABI and GRiD data shows 97.9 per cent of individual protection claims were paid in both 2024 and 2025.[2][3] Within the 2025 figures, the ABI separately reported a record £209 million paid on individual income protection claims at an average claim of £10,700.[7] Because no income-protection-only acceptance rate is published on an accessible primary page, this guide does not quote one.
What do published Ombudsman decisions reveal about why claims are declined?
Reading across published decisions, the same structures recur: medical evidence not supporting the policy’s incapacity definition, an absence that did not span the full deferred period, or a specific exclusion applying.[4][5][6] Some decisions also involve continuing benefit being stopped and then ordered reinstated with interest where the insurer’s evidence did not justify ending it. The pattern across these cases is that the written definition and the deferred period, not the general seriousness of the illness, decide the outcome.
What can someone do to improve their own chances if a claim is ever needed?
Because claims are decided on documents, keeping the policy wording, application answers and ongoing medical evidence organised is the main practical safeguard available. Reading a few published Ombudsman decisions on income protection shows the exact clauses that decide real cases, in plain language and free of charge. If a claim is declined and the decision seems wrong, the Financial Ombudsman Service can review the dispute after the insurer’s own complaints process has been completed, at no cost to the policyholder.

Sources

  1. Financial Ombudsman Service. Annual complaints data and insight 2024/25. 2 July 2025 (primary source)
  2. Association of British Insurers and GRiD, reported by Cover Magazine. Insurers paid £8bn in protection claims in 2024. Accessed 15 September 2026 (primary source)
  3. Association of British Insurers and GRiD, reported by Cover Magazine. Protection insurers paid £7.84bn in 2025. Accessed 15 September 2026 (primary source)
  4. Financial Ombudsman Service. Final decision DRN-5955235 (income protection claim declined — medical evidence of incapacity). Accessed 15 September 2026 (primary source)
  5. Financial Ombudsman Service. Final decision DRN-4775950 (income protection claim declined — policy exclusion and deferred period). Accessed 15 September 2026 (primary source)
  6. Financial Ombudsman Service. Final decision DRN-5719011 (income protection claim declined — own occupation definition). Accessed 15 September 2026 (primary source)
  7. Association of British Insurers. Protection insurers pay out £7.84 billion to help customers safeguard their finances. 29 June 2026 (primary source)