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Income Protection Insurance

One of the safest ways to ensure you have a wage coming in when you can’t work.
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Income protection insurance

Income protection insurance covers a substantial portion of your income during any periods that you’re off work due to sickness or injury. It protects your savings, financial plans and loved ones when you’re too sick to work.

Think about your current sick pay 

The default sickness cover in the UK is Statutory Sick Pay (SSP), which pays just under £100 a week for a maximum of half a year. It’s not much. 

You might have a better arrangement through your employer, but there’ll most likely be an expiry date on their support.

We believe everyone should at least consider income protection. Whether you’re young and renting, or have a mortgage and a family, your income is probably the foundation on which life happens and life grows. 

If the cashflow suddenly stops as a result of sudden injury or ill health it can put us, our finances, our plans, and the people we care about on the back foot.

Income protection - Your grace period

After how long off sick should payment start? The answer usually lines up with existing sick pay. If your work offers six months sick pay - pick six months. If you don’t currently get sick pay - pick ASAP.

What ‘unable to work’ means for you

A designer who breaks a leg can still work, a roofer who breaks a leg can’t. This part makes the policy specific to your job, defining sickness/ injury types that’d force you offline.

What's covered and not covered?

What kind of sickness and injury does income protection cover?

The two most common reasons people are signed off work are depression and back issues, but income protection extends to any reason you’re forced off work sick.

From car accidents to broken bones, stress and anxiety right through to serious medical issues such as stroke and heart attack, so long as you’re signed off as unfit to work, your income protection is there.

What doesn't income protection cover?

Life insurance is for death.

Income protection doesn’t cover redundancy, only health-based absence from work while you’re still employed. Redundancy cover can be bought as part of mortgage protection insurance so if in doubt speak with an expert adviser.

Same as the above: income protection is for health-based absence and doesn’t cover getting fired.

Do I need income protection?

Ask yourself the following questions and you’ll soon know the answer:

  • If you get sick/ injured - what sick pay would you get and for how long?
  • How will you cover bills if you’re off long term sick?
  • How might others be impacted if you get sick and can’t earn?

Planning what if...

When talking income protection, people commonly say three things: 1) it won’t happen to me and 2) I’ll use my savings 3) I’m not the main breadwinner -

You’re much more likely to get sick and need time off work than you are to die before retirement age.

It’s stats time. Around one million UK workers go off work sick each year and roughly 250,000 people –1% of the UK workforce – leave jobs each year because of ill health. Six in ten (150,000) of those who leave jobs due to sickness are their household’s main breadwinner.

In Q4 2021, an estimated one third (33.6%) of the UK labour force was suffering long-term health issues. That’s 3.5% higher than it was five years ago.

Sure, you could. But why would you? You can leave your rainy-day fund in tact if you have income protection to fall back on.

Understood, but your household probably still needs and uses your income. At LifeSearch we talk around about the ‘kicker’ income; the secondary wage which quietly does a job, covering things like fuel or groceries and so on. Your household might not need it, but it will be stretched if it’s gone.

More benefits of income protection

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LifeSearch From our Adviser Team

Unlike other insurance policies, you can claim on income protection as many times as you need over the life of your policy.

Your income protection payments keep coming until one of a handful of things happen:

  • You return to work
  • Your policy term expires
  • Your payment/ claim term expires
  • You leave your job
  • You retire
  • You die

There may be some small print to factor in, so for absolute clarity on an existing or future income protection policy, please speak with a LifeSearch adviser.

How much does income protection insurance cost?

The average cost of an Income Protection policy, to cover you until the age of 65:

Starting Age Cost to cover £1,500 monthly income
£8.77 per month
£10.21 per month
£12.40 per month
£15.61 per month
45 £19.47 per month
£27.94 per month
£34.02per month


*Pricing information obtained 02/02/2023. This data is based on a client with no medical history,  a 3 month deferment period with a 2-year claim period in an administrative role.

Income protection insurance costs vary based on how you earn, what percentage you want to replace, and for how long you want cover to last. It also takes into account the usual factors such as your age, health, occupation and if you’ve any hazardous or high-risk hobbies.

Income protection cost and cover calculator

Our simple calculator can help you to work out what insurance you need and give you estimated costs for different types of life cover. You can then speak to an adviser or buy online.

Get costs & cover ideas

Protect your foundations

Income protection is particularly useful for younger people, renters and those who don’t (yet) have kids.  

While life insurance itself may be unnecessary, income protection firms up the foundations of the life you’re building. It protects your plans; your momentum. 

Your income is probably the bedrock of your life. Protect it and you don’t need to consider downsizing your lifestyle or moving back in with parents. Your savings are safe. You can maintain financial momentum without taking several steps back.

Frequently asked questions about income protection

Assuming you’ve kept up your monthly policy payments, you can activate your income protection if ever you’re signed off work sick, you simply make a claim against your income protection policy.

Once your deferment or grace period – which you selected at application – is over, medical and employer checks may be made and, once everything’s confirmed, your claims payments will start.

They’ll last as long as you need them to until one of the following things happen:

  • you return to work
  • your policy term expiresyour payment/ claim term expires
  • you leave your job
  • you retireyou die

If you’re off sick long-term, your insurer may regularly check in with your doctor and/ or employer to stay current with your situation.

The short version is that as long as you’re off sick and all parties agree, your income protection payments keep coming until the situation changes.

Really, all job types. If you have a zero hours contract or you’re self-employed, contract or freelance you probably won’t get sick pay, and it’s unlikely you’ll be able to access SSP, so income protection has a particularly crucial role to play.

Full time employees may have some sick pay arrangements in play (X months’ full pay, X months’ half pay is a common one), but sick pay benefits are not as favourable today as they once were and most expire fairly quickly.

Income protection typically covers somewhere between 50 and 70% of a person’s wage, but you can go bigger.

When applying for income protection – just like with any other insurance policy – you’ll pick a cover term i.e. how long the policy runs. Typically, it’s 10 years, 15 years or it could be right up until retirement age.

Yes they do. As in all cases, insurers have to confirm the detail and circumstances of an individual’s case. So when a claim is made, medical checks may be carried out and for the duration you’re off sick, the insurer will check in with your doctor and/ or employer for updates on the situation.

The answer differs insurer to insurer but we’ll go out on a limb and say that most insurers do cover periods of absence due to Covid-19.  

But most instances of Covid-19 last for a short period of time, so your income protection policy needs to align (your grace period, your claim period) to satisfy a claim. 

What’s more relevant here is Long Covid, which we’re all learning more and more about as the weeks pass. Where Long Covid forces a significant period off work, income protection will pay in most cases - assuming medics and your employer agree. However do bear in mind that this doesn’t cover pre-existing long covid symptoms. 

Critical illness cover pays a one-off cash lump sum upon diagnosis of something life-changing. It’s a significant one-time payment designed to help you and the people you love make new arrangements, and prepare for a life that’s about to change dramatically.  

Your income protection policy assumes you’ll recover, partially or fully, and get back to work sooner or later. There’s no lump sum payout … it steadily keeps the cashflow coming. 

Income protection and critical illness do different things but they work well together, hand-in-hand, as two policies covering all outcomes.

A different kind of income protection can be purchased by an employer.

Protecting employees through a company can offer tax advantages so if you’re an employer – or a decision maker – speak with a specialist LifeSearch business protection adviser.

If your income depends entirely on your ability to work then income protection is a very good idea. Even a few weeks out the game can be devastating to your bottom line.

If you work for yourself, getting sick can mean lost momentum with projects and clients. It can undo good work done - so it’s worth thinking not just about the immediate impact of getting sick, but the aftermath too.

After a significant absence, how long will it take you to get back to where you were?

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