Your income, protected
if you can't work.

What is income protection insurance?

Income protection insurance — sometimes called permanent health insurance — pays a regular monthly income if you are unable to work due to illness or injury. Unlike sick pay, which your employer may only provide for a limited period, income protection continues paying until you recover, reach your chosen retirement age, or the policy term ends.

How much can income protection replace?

Most policies replace 50–70% of your pre-disability gross income. This level is intentionally set below your full salary to maintain an incentive to return to work. Policies typically have a deferred period — the waiting time between being unable to work and receiving your first payment. Common options are 1, 3, 6, or 12 months. Choosing a longer deferred period reduces your premium and is most appropriate if you have savings or employer sick pay to bridge the gap. Try our free income protection calculator to estimate a suitable monthly benefit and deferred period.

Own occupation vs any occupation definitions

The definition used to assess your claim is the single most important feature of an income protection policy. Own occupation policies — the gold standard — pay out if you cannot do your specific job. Any occupation policies only pay if you cannot work in any capacity. A financial adviser will ensure you are covered on the most favourable terms for your occupation and circumstances.

Short-term vs long-term (full) income protection

Full income protection pays until you recover, retire or the policy ends — the most comprehensive cover. Short-term or limited payment term policies cap each claim at, say, one, two or five years, which lowers the premium while keeping a proper own-occupation definition. For someone on a tight budget, a limited payment term with a strong definition is almost always a better choice than a cheap accident, sickness and unemployment (ASU) policy that uses a weak claims test.

Income protection for the self-employed

The self-employed have the most to gain from income protection, because there is no employer sick pay behind them — and Statutory Sick Pay is not available to the self-employed at all — yet they are the least likely to hold it. How the cover is structured and taxed varies by how you trade. We have detailed, occupation-specific guides for the self-employed Bar, IT contractors, locum doctors and self-employed tradespeople, each covering the claims definition, deferred period and tax position for that profession.

Guaranteed vs reviewable premiums and indexation

Guaranteed premiums are fixed for the policy term; reviewable premiums start lower but can be increased by the insurer. Many policies also offer indexation, which raises both your cover and your premium each year in line with inflation, so a long-term claim keeps its real value. An adviser will weigh these features against your budget and how long you would need the income to last.

What income protection does not cover

Income protection responds to illness and injury that stops you working — it is not redundancy or unemployment cover, and it will not pay simply because work has dried up. That is the key difference from the ASU products often confused with it. It is also not the same as critical illness cover: income protection pays a monthly income for any incapacitating condition, while critical illness pays a one-off lump sum for a specific diagnosis. Many people hold both.