Income Protection Insurance Explained (2026)

It covers most illnesses that leave you unable to work, either in the short or long term, depending on the type of policy and its definition of incapacity. It can be claimed as many times as you need to while the policy lasts.

Statutory Sick Pay is up to £123.25 a week, or 80% of your normal weekly earnings if that is lower, and it is paid for up to 28 weeks. Employees are usually moved onto Statutory Sick Pay within six months, and very few employers support their staff for more than a year if they are off sick from work.

GOV.UK says to qualify for SSP you must be classed as an employee, have done some work for your employer and have been ill for at least one full working day. SSP is the least your employer can pay: you can get more if your company has a sick pay scheme, so check your employment contract.

MoneyHelper says it can be particularly difficult if you are self-employed, because you have no sick pay to fall back on. If you are not eligible for SSP or it ends, GOV.UK says you may be able to apply for Universal Credit or Employment and Support Allowance (ESA).

MoneyHelper says you might not need income protection insurance if:

• you could get by on your sick pay, for example because you have an employee benefits package that gives you an income for 12 months or more
• you could survive on government benefits, provided they are enough to cover all your outgoings
• you have enough savings to support yourself, although your savings might need to last a long time
• you could take early retirement
• your partner or family would support you, for example because your partner has enough income to cover everything you both need

There is often a pre-agreed waiting (deferred) period before the payments start. The most common waiting periods are 4, 13, 26 weeks and a year. The longer you wait, the lower the monthly premiums.

You can choose from three main levels of cover, which pay out based on your situation:

• Own occupation: you cannot do your own occupation. This is usually the most expensive, but it is also more likely that you will make a successful claim
• Suited occupation: you cannot do your own job or a similar one that suits your qualifications and experience
• Any occupation: you are too ill to do any kind of work. This is usually the cheapest, but there is a higher risk of it not paying out

Definitions and exclusions (what is not covered) can vary between different insurers, so make sure you know exactly what is and is not covered.

The amount you pay each month in premiums depends on the policy and your circumstances. MoneyHelper says the cost is affected by:

• your age
• your occupation
• whether you smoke or have smoked
• the percentage of income you would like to cover
• the waiting (deferred) period until the policy pays out
• the range of illnesses and injuries covered
• your current health, weight and family medical history

It also depends on whether you pay a standard premium, which the insurer can increase over time, or a guaranteed premium, which remains fixed for as long as you have the policy. Guaranteed premiums can cost slightly more in the short term.

MoneyHelper says the best way to make sure you get what you need is to get advice from an independent financial adviser or specialist broker, who might charge a fee or be paid commission by insurance companies. There are also specialist brokers and insurers for people who have been declined insurance, perhaps because of a medical condition or a job that is not covered by standard policies.

The FCA's Financial Services Register lists all firms and individuals involved with regulated activities that the FCA has currently or previously approved, and you can search it at register.fca.org.uk. Review your policy regularly: you might need more cover if you have a child or take out a new mortgage, or you might be able to decrease it if you get a new job with more generous sick pay.

For free, impartial help see MoneyHelper at moneyhelper.org.uk.

You have 30 days from buying the policy to change your mind and get a full refund. You can ask your insurer to cancel your policy at any time, and there are usually no cancellation fees, but you will not receive a refund of any premiums you have already paid.

MoneyHelper says to be aware that:

• replacement cover might be more expensive, because prices generally increase with your age
• if you have pre-existing medical conditions, they might not be covered by a new policy
• you will not be able to reinstate the policy once it has been cancelled

If you are struggling to pay, MoneyHelper says to contact your insurer, because insurers must support customers in financial difficulty and can explain your options.