Income protection insurance replaces up to 60–70% of your salary if illness or injury prevents you from working. It’s arguably the most important insurance product most UK adults don’t have.
How Income Protection Works
| Feature | Details |
|---|---|
| What it pays | Monthly income (typically 50–70% of salary) |
| When it pays | After waiting period (4–52 weeks) |
| How long it pays | Until you recover, retire, or policy ends |
| Tax treatment | Payouts are tax-free |
| Cover basis | Own occupation (best) or any occupation |
Monthly Cost Estimates
Protecting £2,000/month income, to age 68:
| Age | 4-Week Wait | 13-Week Wait | 26-Week Wait |
|---|---|---|---|
| 25 | £25–£40 | £15–£25 | £12–£20 |
| 30 | £30–£50 | £20–£35 | £15–£25 |
| 35 | £40–£65 | £30–£45 | £20–£35 |
| 40 | £55–£85 | £40–£60 | £30–£45 |
| 45 | £75–£120 | £55–£85 | £40–£65 |
| 50 | £110–£170 | £80–£120 | £60–£90 |
Choosing your waiting period: Match it to how long your employer pays sick pay, plus your emergency fund coverage.
Who Needs Income Protection?
| Your Situation | Priority |
|---|---|
| Self-employed / freelance | Essential — no employer sick pay |
| Employed, limited sick pay | High |
| Main breadwinner with dependants | High |
| Employed, 6+ months sick pay | Medium (longer waiting period) |
| Large emergency fund (12+ months) | Lower (longer waiting period) |
| No dependants, large savings | Optional |
Income Protection vs Other Products
| Product | Pays Out | Covers |
|---|---|---|
| Income protection | Monthly income | Any illness/injury preventing work |
| Critical illness | Lump sum | Specific serious conditions only |
| Life insurance | Lump sum | Death only |
| PPI | Monthly, limited term | Unemployment + some illness |
| Statutory Sick Pay | £116.75/week | First 28 weeks (very low) |
Key Terms to Understand
| Term | What It Means |
|---|---|
| Own occupation | Pays if you can’t do YOUR job (best) |
| Any occupation | Only pays if you can’t do ANY job (avoid if possible) |
| Guaranteed premiums | Price stays the same for the whole term |
| Reviewable premiums | Start cheaper but insurer can increase |
| Deferred period | Waiting time before payments begin |
| Indexation | Benefit increases each year with inflation |
The SSP Problem
UK Statutory Sick Pay is just £116.75 per week (as of 2025/26) — that’s less than £500/month. It lasts only 28 weeks. After that, you’d rely on Universal Credit, which provides even less. Income protection fills this enormous gap.
| Income | SSP Covers | Gap per Month |
|---|---|---|
| £25,000 | 24% | £1,576 |
| £35,000 | 17% | £2,410 |
| £50,000 | 12% | £3,660 |
| £70,000 | 9% | £5,244 |
Bottom Line
Income protection is the most underrated insurance in the UK. You’re far more likely to be off work for months due to illness than to die during your working years. Priority order: own-occupation cover, guaranteed premiums, waiting period matched to your sick pay. Self-employed workers should treat this as essential — you have zero safety net without it.
See our best life insurance UK or home insurance guide for other essential cover.