Income protection insurance, commonly referred to as income protection, is a policy that pays you a portion of your regular payments in replacement of your usual income when you’re unable to work due to unexpected injury or illness.
Many people use income protection as a financial safety net to cover essential expenses, such as mortgage or rent payments, and bills. However, several key factors require careful consideration before choosing a policy.
To find out more about what income protection is and how it works, continue reading.
How Does Income Protection Work?
Income protection works by replacing some of your usual income from employment when you’re unable to work due to unexpected injury or illness.
The process works by:
- Paying a monthly fee for the policy to stay active
- Choosing a waiting (deferred) period, which is commonly 4, 13, or 26 weeks, or 12 months
- Filing a claim with proof, such as medical records
- Waiting for your payout, which is typically between 50% and 70% of your income
- Continuing to receive your payments until you recover, retire, pass away, or the policy ends
The longer the deferred period, which is how long you’ll have to wait before receiving monthly payouts, the lower your monthly premium will be. For example, opting for a 26-week deferred period (matching typical employer sick pay) will likely reduce your monthly premium by up to 50% compared to the shortest 4-week wait.
When is Income Protection Needed?
Income protection is likely needed if you have:
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- No income from your job due to a sudden injury or illness
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- Are self-employed with no sick pay safety net
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- A high-risk job with exposure to injury or illness
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- Limited savings to cover your outgoings if injured or sick
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- High fixed costs, such as mortgage or rent, and rely on a single income
However, you may not need to rely on income protection if you could:
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- Survive on your sick pay due to certain employee benefits
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- Survive on government benefits
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- Survive on your own savings
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- Take an early retirement
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- Ask family members or friends to support you financially
What Does Income Protection Cover?
Income protection covers any unexpected injury or illness that prevents you from working, commonly including:
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- Physical injuries, such as broken bones, back pain, or neck issues
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- Mental health issues, such as anxiety, stress, or depression
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- Serious illnesses, such as cancer, stroke, heart attack
Unfortunately, income protection doesn’t cover other sudden salary losses, like being made redundant or dismissed from your job, as these are related to employment, not your health.
Is Income Protection Worth it?
Income protection is generally worth it if you rely on your salary for essential outgoings, like your mortgage, rent, and bills. If you’re the main earner in your home, have dependents (such as children), get minimal sick pay from your employer, and have little to no savings to rely on, then income protection may also be worth it for peace of mind and financial security.
Tips When Buying Income Protection
If you’re looking for the best income protection insurance policy, we have a few helpful tips to ensure the best coverage.
1 – Provide Accurate Medical History
You must provide your chosen insurer with an accurate medical history, as they’ll check your information if you ever need to make a claim. If they find that you’ve provided false or inaccurate information during your initial application, you may not receive the payout you thought you would.
2 – Choose a Suitable Cover Level
Policies in the UK typically offer three main types of income protection.
| Type | Covers | Expense Range | Claim Success |
| Own occupation | When you can’t do your specific job | Most expensive | Likely |
| Suited occupation | When you can’t do your job or one similarly suited to your skills or education | Moderately expensive | Possible |
| Any occupation | When you can’t do any job | Least expensive | Unlikely |
3 – Review Regularly
You should take time to read the small print of all insurance policies, including income protection. Despite reading the initial small print, things can change. This is why it’s essential to regularly review your insurance policy to ensure it matches your current income, job type, and overall health status to avoid issues with future claims.
The Cost of Income Protection
Most standard policies can start from around £50 per month, but this can widely vary depending on the specific type of policy you choose and your personal circumstances.
The cost of income protection is typically affected by:
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- Your age
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- Your current health status
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- Your medical history
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- Your family’s health status
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- Your job title
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- If you’re a smoker
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- The injuries and illnesses you want to cover
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- How much of your income you want to cover
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- Your preferred deferred period
To lower your monthly premium, we recommend increasing the deferred period to match the waiting time for your company’s sick pay. Additionally, you can lower costs by choosing a shorter benefit period (how long your insurance will make payouts) and reducing the amount of income you wish to be covered.
Tailored Income Protection Solutions
According to Mintel’s UK Income Protection Market Report 2026, 59% of workers expect to face financial hardship within around six months of not working due to unexpected injury or illness, and a further 15% don’t know how long they’d be able to manage for.
At JG Mortgages, our advisers offer tailored income protection services to help find the most suitable cover for your circumstances, even if you’re self-employed and have no company sick pay.
Our expert advisers have your best interests at heart, and they’re dedicated to finding the best income protection to cover your mortgage or rent payments, bills, and other essential living costs when you’re unable to work due to injury or illness.
Please contact our income protection advisers today for tailored cover that keeps you protected.
FAQs
Can I cancel my income protection?
Yes, you can usually cancel your income protection policy at any time without a cancellation fee. However, be aware that replacement cover could be more expensive due to age, and once fully cancelled, you usually can’t reinstate your original policy.
Can I get income protection if I’m self-employed?
Yes, you can get income protection if you’re self-employed. It’s often considered more important to get income protection as a self-employed worker, as you have no employer’s sick pay to rely on.
Does income protection cover arthritis?
Yes, income protection typically covers arthritis if it prevents you from working. However, some insurers may exclude claims related to arthritis if you were diagnosed before applying, and could even increase your monthly premium due to having the condition.
What are the disadvantages of income protection?
Income protection offers many advantages, but it has some potential drawbacks to consider:
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- Most policies only cover a percentage of your earnings, which means some costs must be covered using other personal funds
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- Costs increase based on various factors, such as age, job risk, and medical history
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- Payments don’t start immediately
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- Pre-existing medical conditions are often excluded from coverage, and can make your monthly premium higher
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- Policies only cover injury or illness, not redundancy or dismissal
However, the pros outweigh the cons, and income protection can be beneficial for most people in case an unexpected illness or accident occurs.
