Income Protection Insurance.

Income Protection Insurance

Don’t let a serious illness or injury turn into a financial burden.
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Is Income Protection Insurance Right for You?

If you would struggle to make ends meet if you were unable to work due to injury or illness, you should consider income protection. Almost a million people every year are unable to work due to injury or illness, and most of them cannot cover their expenses for very long without additional support. This tipe of insurance is a good option for anyone who wants to ensure that their income will always be protected.

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Further Reading...

What is income protection insurance?

Income insurance pays out in the case that you should fall ill or become injured and are unable to work. It is a long-term insurance policy, and it will replace some or most of your regular income.

How much does income protection insurance cost?

This will vary according to your provider and coverage needs. It will also depend on your job, your health, and your age. Plans start around £8 per month at the very low end, but can increase significantly if you want more extensive coverage or have severe health problems.

What is covered by income protection insurance?

Protecting your income with an insurance covers a portion of your income in case of:

  • Severe injury
  • Serious illness

You must be unable to work for a significant period of time.

What is not covered by UK income protection insurance?

You can’t receive protection benefits for just any illness or injury. The following are not covered by protection of your income:

  • Self-inflicted injury
  • High-risk occupations (such as coal mining or working at extreme heights)
  • Injury from high-risk activity (such as rock climbing and deep-sea scuba diving)
  • Mental illness
  • Injury or illness that is the result of criminal activity

Is unemployment ever covered by income protection insurance in the UK?

It can be. Some providers will offer the option to include protection for unemployment. This is often called a “redundancy benefit” – it replaces a portion of your income in the case that you are involuntarily unemployed. It will not cover you if you are fired by fault of your own or quit.

What is short-term income protection?

A short-term protection plan pays out for a fixed term that you choose in the case of serious but not permanent injury or illness. Terms are usually 6 months, 1 year, or 2 years.

What is long-term protection of income?

Long-term financial protection plans pay out until the plan expires or you retire in the case of serious or terminal illness that makes it unlikely you’ll ever return to work.

Do I get paid in a lump-sum?

No. You get payments in the form of monthly income.

How is income insurance different from critical illness cover?

Unlike critical illness cover, which is paid as a lump-sum should you fall critically ill, income insurance pays out in the form of monthly income. It may often include coverage for more illnesses and injuries than critical illness cover.

How much money will I get from income protection insurance (UK)?

This depends on your provider. Most providers have a maximum claim set to your after-tax earnings, minus any government benefits or other payments you might be receiving. Typically, the maximum payout is about 70% of your income. Of course, the lower your coverage, the lower your premiums.

Is there a waiting period before I start receiving payments?

Yes. It is called the deferred period, and it can last anywhere from 4 weeks to one year. Most people will set their payments to start after their sick pay and payments from any other insurance policies end. The longer you set your waiting period, the lower your premium will be.

How long will I receive payments from my protection of income?

This depends on your policy. Typically, providers will offer monthly payments until your plan expires, you go back to work, or you hit retirement age – whichever comes first.

Can I be protected even if I’m over the normal retirement age?

Usually not. Most providers will require you to be under the age of 65 or 70 in order to receive coverage.

Can I make more than one claim?

Yes. You can make as many claims as you need to until your policy expires.

How can I get covered now?

This one's easy! Click here to get yourself a free income protection insurance quote.

Frequently Asked Questions

What is life insurance?

Life insurance is a type of insurance policy that pays out a lump sum of money to your family & dependents in the event of your death.

Life insurance is one of the most generous things you'll ever purchase. By purchasing a life plan, you can make sure that the people you love the most are well looked after should the worst happen.

Get a quote now >

Read more about critical illness life insurance >

Read more about income protection life insurance >

Which type of life insurance cover is right for me?

There are three main types of life insurance cover - these are:

Level term insurance policies pay out if you die within a fixed timeframe which you choose up front. Premiums and pay-out stay the same, regardless of whether you die on the first day, or the last day of the policy.

Learn more about level term life insurance >

The whole of life policies guarantees to pay out regardless of when you die – with no fixed time limit. These are normally more expensive, but you can get lower monthly costs by taking out an Over-50s policy.

Learn more about whole life insurance >

Decreasing term insurance policies are usually aimed at covering the remaining debt on a repayment mortgage if you die. These policies usually have a set timeframe and the pay-out decreases over the policy term – usually in line with the remaining mortgage debt. There are other tailored life insurance plans (such as Critical Illness Cover, Income Protection and Mortgage Protection).

How much does life insurance cost?

This really depends on your own specific circumstances, but the average UK monthly life insurance cost is roughly £8.50 (but can be as little as £5 per month). The factors that have an impact on your life insurance costs include:

Age: Usually, life insurance rates increase as you age. If you are already over 50.

Health: Do you smoke? Any chronic conditions? These could have an effect on the cost of your life insurance.

Read more about critical illness insurance here >

Gender: Statistically, women live longer - and pay lower life insurance because of it.

Occupation: Some jobs require more health risks - if you're a sky diving instructor, you will most likely be paying more on life insurance than the typical office worker.

Examination: A thorough medical checkup will let the insurer know if you're low risk - meaning your monthly payments will be lower.

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What is Income Protection?

Income protection insurance will pay you a proportion of your income if you are unable to work due to sickness or injury. This will help if you are the sole breadwinner and would hit financially instability if you were no longer able to work.

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Income protection will make up a proportion of your income however if you specifically want to receive a lump sum if you are diagnosed with a critical illness

Read more about critical illness insurance >

Is Income Protection right for me?

If you are the sole breadwinner in your family, and have multiple dependents, Income Protection could be a great way to keep your family from financial issues if you were no longer able to work.

Click here if you also wish to enquire about critical illness life insurance to receive a lump sum if you are diagnosed >

How much will I leave behind, if anything were to happen?

Again, this is largely dependent on the type of life insurance policy you decide to take out. The average life insurance payout is roughly £51,000, but with certain providers, this average raises to over £115,000.

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However, these averages are basic indications on how much your dependents would receive in the case of your death. Unfortunately, there is no sure-fire way to know how much would be paid out, and your best bet is to get a free quote and see for yourself.