What to know about how much income protection costs
Thinking about how much income protection costs
What works well
- A fixed specification makes quotes genuinely comparable.
- A longer deferred period cuts the premium substantially.
- Guaranteed premiums remove future repricing risk.
What to watch
- Averages without sources cannot predict an individual quote.
- A cheaper quote usually means a stricter incapacity definition.
- Reviewable premiums can rise sharply at review dates.
Why the honest answer is a method, not a number
Every circulated “average premium” hides a different mix of ages, occupations and benefit levels, so it cannot predict your quote. Income protection pricing is unusually sensitive to occupation — insurers grade jobs by how likely they are to cause absence — and to the deferred period, because a longer wait removes every short absence from the insurer’s risk. The disciplined approach is to fix the specification first: monthly benefit, deferred period matched to your sick pay, benefit period to your planned retirement age, guaranteed premiums. Then collect written quotes against that identical specification and compare them line by line. What the structure tells you without any figures: premiums rise with age because absence risk does; smoking and hazardous pastimes load the price; and a four-week deferred period can cost meaningfully more than a thirteen-week one for identical benefit. No insurer or trade body publishes a comparable market-wide table of income protection premiums by age band, so none is quoted here.
Write down your exact specification, request quotes against it in writing, and keep each insurer’s document with its date — a quote without a date is not comparable. Whatever the specifics of how much income protection costs, 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.
What moves the price
Income protection premiums are set from your age, your occupation — insurers grade jobs by how likely they are to cause absence — your answers on health, lifestyle and smoking, the monthly benefit, the deferred period, the benefit period and the premium type. Guaranteed premiums stay fixed for the term; reviewable premiums can be re-priced by the insurer at set intervals; age-banded premiums rise on a published schedule. A longer deferred period cuts the premium substantially because the insurer never pays for shorter absences. Average premium figures circulate widely online, but an average built from different ages, occupations and benefit levels cannot predict your quote — treat any average without a named source and a date as unusable. No insurer or trade body publishes a comparable market-wide average income protection premium, so none is quoted here.
One genuine lever exists beyond the cover design itself: matching the deferred period to your real sick pay. If your employer pays three months of full pay, a four-week deferred period makes you pay twice for the same weeks. Written quotes against an identical specification — same benefit, same deferred period, same occupation class, same premium type — are the only honest comparison. Pay-out statistics matter when weighing price against reliability: ABI and GRiD data shows 97.9 per cent of individual protection claims were paid in 2024 and again in 2025. [1][2]
| Measure | Figure | How to read it |
|---|---|---|
| Total protection pay-outs, 2024 | £8 billion | Group and individual life, critical illness and income protection claims combined — a record year |
| Individual protection pay-outs, 2024 | £5.32 billion | Individual life, income protection and critical illness claims, up 10% on 2023 |
| Individual claims paid, 2024 and 2025 | 97.9% | The share of individual protection claims insurers paid |
| Average individual claim, 2024 | £18,700 | Across all individual protection claim types — not an income-protection-specific figure |
| Paid every day, 2024 | £21.9 million | The daily equivalent paid to people experiencing bereavement, illness and injury |
| Total protection pay-outs, 2025 | £7.84 billion | £5.15 billion of it on individual policies; 258,000 new claims |
- 2023£7.34 billion
- 2024£8 billion
- 2025£7.84 billion
How to compare two quotes
- Fix the cover first: the amount, the term and whether premiums are guaranteed or reviewable.
- Ask for each quote in writing, with its date.
- Put the quotes side by side and mark every difference in terms before you look at price.
- Ask whether any exclusion or price increase was added because of your health answers.
Related guides
- What income protection is
- Your disclosure rights: income protection and pre-existing conditions
- If a claim goes wrong: do income protection policies pay out?
- Income protection, sick pay and benefits
Looking at cover with PremierPMI
PremierPMI is a specialist private medical insurance broker and the publisher of The Health Guide. If you want to talk through what this means for your own cover, you can start there.
Or, if you would rather start here, send an enquiry and PremierPMI will contact you.
Common questions
Why can’t an average premium figure be used to predict a quote?
What is the most reliable way to compare prices between insurers?
What does choosing a longer deferred period do to the price?
Sources and methodology
- [1] Association of British Insurers and GRiD, reported by Cover Magazine. “Insurers paid £8bn in protection claims in 2024”. View source(opens in a new tab)Primary source
- [2] Association of British Insurers and GRiD, reported by Cover Magazine. “Protection insurers paid £7.84bn in 2025”. View source(opens in a new tab)Primary source
We cite primary sources wherever possible. Read about our sourcing methodology.
Parvoz Haydarov
Founder, PremierPMI
- Founder of PremierPMI
- Whole-of-market private medical insurance
Parvoz founded PremierPMI as a specialist private medical insurance brokerage. He sets the direction of the firm — insurer relationships, service standards, compliance culture and the editorial bar for everything published under the PremierPMI name — and personally reviews the largest corporate and family cases before they go to market.
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Ilana Eldad
Corporate PMI Specialist, PremierPMI
- ACCA-qualified
- Corporate and SME scheme specialist
Ilana oversees business health insurance schemes for the corporate and SME team, guiding employers from initial quotes through claims and renewal. ACCA-qualified, she applies that financial background to reducing premiums and advising on tax-deductibility, and runs the largest corporate portfolio at PremierPMI.
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