Is income protection worth it? If you’re unsure whether income protection insurance, commonly referred to simply as income protection, is worth investing in, we’re here to help you decide. We understand that income protection is an additional expense, but it can certainly be worth it if you become unexpectedly injured or ill.
To learn more about what income protection is and whether it’s worth it, read on.
What is Income Protection?
Income protection is an insurance policy that pays a portion of your monthly income (usually up to 70%, although this can widely vary) if you’re unable to work due to sudden injury or illness. The policy helps cover any essential outgoings, such as mortgage or rent payments, bills, and other daily living expenses.
You must pay a monthly fee and choose a waiting (deferred) period before making a claim to receive a payout. The longer the selected waiting period, the lower your monthly premium is likely to be.
Why Should You Consider Income Protection?
Income protection helps cover essential outgoings when you can no longer rely on your salary. If you think about everything you pay for – mortgage or rent, electricity, heating, and childcare if necessary, what would pay for them if you suddenly became injured or fell ill?
This is where your income protection cover steps in.
Worrying about money in general is one thing, but worrying when you have no income after a sudden accident or illness is something entirely different. Having income protection allows you to work with reassurance, knowing that if anything were to happen, you would be covered with insurance to help pay for essential outgoings.
Income Protection: Pros and Cons
There are pros and cons to everything, even income protection. Despite the many benefits it offers, it’s important to be aware of any potential risks or drawbacks.
| ✓ Pros | ✖ Cons |
|---|---|
| Policies usually pay between 50% and 70% of your monthly income | Other costs may need to be funded by personal savings |
| Costs may be lower if you’re younger, have a low-risk job, and have a good medical history | Costs can increase if you’re older, have a high-risk job, and have a poor medical history |
| Longer deferred periods usually lower your monthly premium | Payments don’t start immediately |
| Being honest about your health at the start helps avoid claim disputes | Pre-existing medical conditions are excluded from coverage |
| You can cancel your policy at any time without a cancellation fee | Policies only cover health-related issues, not redundancy or job dismissal |
The pros typically outweigh the cons when it comes to income protection insurance, as it offers protection, reassurance, and financial aid when you need it most.
The potential drawbacks are manageable, and with careful planning, such as choosing an appropriate deferred period and keeping an emergency fund, you can find a suitable policy.
What Does Income Protection Cover?
Income protection covers a range of health-related scenarios that prevent you from working. Most income protection policies do cover:
- Mental health issues, such as anxiety or depression
- Physical conditions due to broken bones or other sudden injuries
- More serious or life-threatening illnesses, such as cancer
- Multiple claims over the policy lifespan
However, they don’t cover:
- Redundancy
- Job dismissal
- Pre-existing health conditions
- Deliberate or self-inflicted injury or illness
To ensure you’re covered if something unexpected happens to your health, you must be 100% honest about your current and past medical history when you apply for the insurance policy. If you fail to provide correct information, you might not receive the expected payout.
How Much is Income Protection?
Income protection costs typically vary between £10 and £100 per month, depending on key factors such as your age, medical history, job title, chosen deferred period, and how much of your income you’d like to cover.
For example, if you’re in your early 20s with an office job and no major medical history, you’ll probably pay around £10 per month compared to an older individual in their 50s with a more physical job and pre-existing health conditions.
Is Income Protection Worth it?: Your Helpful Checklist
Income protection insurance is generally worth it if you heavily rely on your monthly salary to pay for essential living costs. It can be hard to decide whether income protection is really worth it, but in most cases, it probably is!
If any of the following situations apply to you, then income protection is likely worth it if you:
- ✓ Rely on the income from your job
- ✓ Have minimal savings to fall back on
- ✓ Receive a small amount or no sick pay from your employer
- ✓ Have family members who rely on your income
- ✓ Are self-employed with no sick pay
- ✓ Want reassurance that you’re protected against certain injuries and illnesses
However, if any of the following situations apply to you, then income protection is likely not worth it if you:
- ✖ Don’t rely on the income from your job too much
- ✖ Have an adequate amount of savings to fall back on
- ✖ Receive enough sick pay from your employer
- ✖ Have no family members who rely on you
- ✖ Think that the loss of income from your job won’t be due to injury or poor health
- ✖ Have a partner or family member to support you financially
Alternatives to Consider
Income protection is generally the best option for replacing income, but there are always alternatives to consider that provide financial aid in similar situations.
Statutory Sick Pay (SSP)
Statutory Sick Pay (SSP) is the minimum amount of money that eligible employees in the UK can receive when they’re too ill to work. SSP is a legal requirement, providing up to £123.25 per week as of April 2026 (or 80% of average weekly earnings if lower) for up to 28 weeks.
Critical Illness Cover
Critical illness cover pays a one-time lump sum of tax-free money if you’re diagnosed with a certain, severe medical condition (such as cancer). The coverage offers peace of mind to reduce financial strain during illness or recovery by covering the cost of essential bills.
Mortgage Payment Protection Insurance (MPPI) Cover
Mortgage Payment Protection Insurance (MPPI), also referred to as Accident, Sickness, and Unemployment (ASU) insurance, only covers essential payments for a period of time (usually 12 to 24 months). This type of protection is commonly used if you’re unable to work due to injury, illness, or even redundancy.
Personal Savings
Using personal savings is the most flexible option if you fall ill and can’t work, as they can cover any expense. However, you’ll be fully reliant on yourself, and savings will eventually run out if you use them to cover all of your living expenses for a long period.
Find the Best Suited Income Protection Today
At JG Mortgages, we offer income protection support as part of our additional services. If you believe that income protection is worth it, our experienced advisers can help you find the most suitable cover for your personal circumstances.
We can help you find the best type of policy by assessing your situation and answering any important questions you may have along the way.
To find the most suitable income protection insurance cover, please contact us today.
FAQs
How long does income protection pay out?
Income protection typically pays out until you return to work, reach the retirement age, or the policy comes to an end. Short-term policies usually pay for 1, 2, or 5 years for each claim, while long-term policies can pay until retirement.
Is income protection tax-deductible?
Individual income protection premiums are generally not tax-deductible because they’re paid from income that has been taxed already.
Can I get income protection if I’m self-employed?
Yes, you can get income protection if you’re self-employed! Investing in income protection while working self-employed provides a safety net if injury or illness ever stops you from being able to work.
If I never make a claim, will I get my money back?
No, if you never make an income protection claim, that does not mean you will get your money back. This type of insurance is used to protect your income if you’re unable to work, and it’s not a type of savings plan.
