COVERLIFE SERVICES
Income Protection
Protect your income if you're unable to work due to illness or injury.
The Deferred Period Is The Price Lever
Income protection does not start paying the day you stop working. It starts after a deferred period you choose, and that choice moves the premium more than almost anything else. Four weeks is expensive. Twenty-six weeks is a great deal cheaper for the same benefit.
The right answer is not the shortest one you can afford. It is the point at which your sick pay runs out. If your employer pays six months in full, a policy paying from week four is largely buying cover you already have. Match the deferred period to the end of your sick pay and you often get better cover for less money.
What To Check On Any Quote
- •Own occupation, suited, or any occupation
- •The deferred period, against your sick pay
- •Full term or a capped payment period
- •Whether the benefit is index linked
- •Guaranteed or reviewable premiums
- •How mental health is treated
What is Income Protection?
Income Protection is an insurance policy designed to pay you a regular monthly income if you're unable to work due to illness or injury. It ensures your essential bills and living costs are covered while you recover. Unlike statutory sick pay, Income Protection can provide coverage until you return to work, retire, or reach the end of your policy term.
Why is Income Protection Important?
Most of us rely on our income to cover essential costs. If illness or injury forces you out of work, the financial pressure can be overwhelming:
Housing Costs
Ensure mortgage or rent payments are covered while you recover
Family Expenses
Cover childcare, education, and family living costs
Debt Repayment
Maintain loan and credit repayments during recovery
Financial Peace
Avoid stress and worry about money while focusing on recovery
Who Should Consider Income Protection?
Self-Employed Professionals
Protect your income when you don't have access to employer sick pay or company benefits.
Employees with Limited Coverage
Supplement low or non-existent long-term sick pay benefits from your employer.
People with Commitments
If you have a mortgage, family dependents, or regular financial obligations to maintain.
Anyone Seeking Security
Get peace of mind knowing your finances are protected if illness or injury strikes.
Key Benefits of Income Protection Insurance
Replace Your Income
Regular monthly payments replace income lost due to illness or injury
Maintain Lifestyle
Keep meeting financial commitments and maintaining your family's living standards
Reduce Stress
Focus on recovery without worrying about money or financial pressure
Long-Term Security
Especially valuable if you have dependents who rely on your income
Protect Your Income
Don't leave your financial security to chance. With CoverLife's Income Protection, you can have peace of mind knowing your income is protected if illness or injury prevents you from working.
Own Occupation Is The Definition That Matters
Policies define incapacity in one of three ways, and the difference decides most disputed claims. Own occupation pays if you cannot do your own job. Suited occupation pays only if you cannot do your job or another suited to your experience. Any occupation pays only if you cannot do any work at all.
For anyone whose income depends on a specific skill, own occupation is worth paying for. A plumber with a back injury, or a dentist who loses grip strength, has a clear claim on the first definition and a fight on the third. Cheaper policies are often cheaper because of this one clause.
How Much It Pays, And Why It Is Capped
Insurers will normally cover somewhere between fifty and sixty-five per cent of your gross income, and the benefit is paid tax free. It is capped deliberately, so that being off sick never pays better than working. You cannot insure your full salary, and a policy sold on the basis that you can will be cut back at claim.
If you are self-employed the insurer will usually work from your taxable profit rather than your turnover or your drawings, which for many people is a much smaller number than they expect. It is worth establishing the figure before you decide the cover is not worth having.
Full Term Or Short Term
A full term policy keeps paying until you recover, retire or die, whichever comes first. A short term one pays for a capped period, commonly one, two or five years, then stops even if you are still unable to work. Short term is considerably cheaper and covers the situation most people actually experience.
It also leaves the worst case uncovered, which is the one that ruins households: an illness or injury that ends a career at forty. If budget forces a choice, a longer deferred period on a full term policy is usually a better trade than a short term one with a quick start.
What It Costs
Income protection starts from around five pounds a month, subject to your age, health and lifestyle, with most comprehensive policies landing somewhere between fifteen and fifty pounds. That is the mainstream market range and it is what we can arrange, because we place the same insurers the comparison sites do.
Occupation matters here in a way it does not for life cover. Manual trades cost more than desk jobs because the claims are more frequent and last longer. The deferred period, the benefit amount and whether the policy is full term or short term are the levers that actually move the number.
Cover that often goes with this
The gaps we most often find sitting next to this one.
- Critical illness coverA lump sum on diagnosis rather than a monthly income while you are off. Different trigger, different money.
- Executive income protectionIf you are a company director paid in dividends, the company-paid version can insure income a personal policy generally cannot.
- Life insuranceThe other half of household protection, and usually the cheaper of the two.
Common questions
How much does income protection pay?+
Usually between fifty and sixty-five per cent of your gross income, paid tax free. It is capped so that claiming never pays better than working. If you are self-employed the insurer normally works from taxable profit rather than turnover or drawings, which is often a lower figure than people expect.
What is a deferred period on income protection?+
The wait between becoming unable to work and the policy starting to pay. Common options are four, eight, thirteen, twenty-six and fifty-two weeks. A longer deferred period makes the policy considerably cheaper, and the sensible choice is the point at which your employer sick pay stops, so you are not paying to insure a period you are already covered for.
Is income protection better than critical illness cover?+
They answer different questions. Income protection pays a monthly income for as long as you cannot work, whatever the cause, including back problems and mental health, which are the most common reasons for long absences. Critical illness pays a lump sum for a named diagnosis whether or not you stop working. If you can only afford one and the worry is your income stopping, income protection usually covers more of the risk.
How much is income protection a month?+
From around five pounds a month, subject to your age, health and lifestyle, with comprehensive cover typically between fifteen and fifty pounds. Your occupation matters more here than on a life policy, because manual work produces more claims and longer ones. The deferred period is the biggest lever you control.
Does income protection cover mental health?+
Most policies do, and mental health is among the most common causes of long-term absence, so it is worth confirming rather than assuming. Some insurers apply exclusions where there is a history at application. Declaring that history is what keeps the rest of the policy sound.
Can I get income protection if I am self-employed?+
Yes, and it matters more than for an employee, because there is no sick pay behind you. The insurer will assess your income from taxable profit, so recent accounts or tax calculations are usually needed. Newly self-employed applicants can still get cover, though the way income is evidenced differs by insurer.
Related reading
Guides from our team on the cover discussed on this page.
