Your income, protected if you can’t work
Income protection pays you a regular tax-free income if illness or injury stops you working. Unlike critical illness, it covers any condition—not just specific ones—and pays out monthly until you recover or retire.
How it works
Unable to work due to illness, injury, or mental health condition
What is income protection?
Income protection insurance pays you a regular monthly income if you’re unable to work due to illness, injury, or mental health conditions. It’s designed to replace your salary so you can keep paying bills while you focus on getting better.
Unlike critical illness cover (which pays a one-off lump sum for specific conditions), income protection covers any condition that stops you working—from a bad back to cancer to depression. And it pays you every month until you’re well enough to return to work, or until retirement if you can’t.
You typically receive between 50-70% of your gross salary, tax-free. Because it’s tax-free, this often comes close to your normal take-home pay.
Why it matters: If you couldn’t work for 6 months, could you pay your mortgage, bills, and living costs? Most people couldn’t survive more than a few weeks on savings alone.
Income protection is often considered the most comprehensive form of protection insurance because it covers you for the widest range of scenarios and provides ongoing support rather than a single payout.
How protection types compare
Each covers different situations
💡 Broadest range of cover Income protection covers a wider range of situations than most other types of cover
Your biggest asset is your income
Most people insure their car and home, but not the income that pays for everything. Here’s why income protection matters.
Keep paying the mortgage
Your mortgage doesn’t stop if you get ill. Income protection ensures you can keep making payments and stay in your home while you recover.
Cover everyday bills
Council tax, utilities, food, transport, childcare—life doesn’t get cheaper when you’re ill. Income protection keeps your household running.
Long-term security
Sick pay typically runs out after a few months. Income protection can pay for years—until you recover or reach retirement age.
Any illness or injury
Back problems, mental health, accidents, chronic conditions—income protection covers any condition that stops you working, not just specific diseases.
Protect your family
If your household depends on your income, a serious illness affects everyone. Income protection keeps the financial pressure off your family.
Focus on recovery
Financial stress makes illness worse. With your income protected, you can concentrate on getting better without worrying about money.
Understanding your policy options
Income protection has several choices that affect your cover and cost. Here’s what they mean.
Deferred period (waiting time)
How long you wait after becoming ill before payments start. A longer wait = lower premiums.
Definition of incapacity
How the insurer decides if you’re unable to work. This is crucial—get it right.
Benefit amount
How much you receive each month. Usually 50-70% of your gross income.
Policy type
Whether your premiums stay the same or can change over time.
Worth considering: “Own occupation” definition with a deferred period that matches your sick pay. If your employer pays 3 months sick pay, choose a 13-week deferred period to keep costs down without leaving a gap.
How much cover do you need?
Most people insure 50-70% of their gross salary. Since payments are tax-free, this usually replaces most of your take-home pay.
Quick calculation example
Example monthly premiums
For £2,000/month benefit, own occupation, 8-week deferred period:
| Profile | From |
|---|---|
| Age 30, office worker, non-smoker | £32/month |
| Age 35, office worker, non-smoker | £42/month |
| Age 40, office worker, non-smoker | £58/month |
| Age 35, manual worker, non-smoker | £65/month |
| Age 35, office worker, smoker | £68/month |
What affects your price
Several factors determine how much you’ll pay:
Your age
Younger = cheaper. Premiums increase with age.
Your job
Office workers pay less than manual/outdoor workers.
Smoking
Smokers pay significantly more.
Deferred period
Longer wait before payments = lower premiums.
Health
Pre-existing conditions may affect premiums.
Prices are illustrative only. Your actual quote depends on your specific circumstances. See your options — takes about 2 minutes.
Income protection questions
What’s the difference between income protection and critical illness?
Critical illness pays a one-off lump sum if you’re diagnosed with a specific condition on their list (like cancer or heart attack). Income protection pays a regular monthly income if you can’t work due to any illness or injury—not just specific conditions. Income protection is more comprehensive but critical illness is useful for immediate large costs like paying off a mortgage. Many people benefit from having both.
Does income protection cover mental health conditions?
Yes. Income protection covers any condition that stops you working, including depression, anxiety, burnout, and other mental health issues. Mental health is now one of the most common reasons for claims. Some policies may have specific terms around mental health, so we’ll help you find one with good mental health cover.
How long do I have to wait before I can claim?
This is called the “deferred period” and you choose it when you set up your policy. Common options are 4 weeks, 8 weeks, 13 weeks, or 26 weeks. A longer deferred period means lower premiums. Most people match it to their employer’s sick pay—so if you get 3 months’ sick pay, choose a 13-week deferred period.
What does “own occupation” mean?
“Own occupation” means you’ll be paid if you can’t do your specific job. This is the strongest type of cover. For example, a surgeon who can’t operate would still be covered even if they could do administrative work. “Any occupation” cover only pays if you can’t do any work at all—this is much harder to claim on and we rarely recommend it.
Is the payout taxable?
No. Income protection payments are completely tax-free when you pay the premiums yourself. This means 60% of your gross salary often comes close to your normal take-home pay. If your employer pays the premiums, the benefit may be taxable.
Can I claim more than once?
Yes—this is a key advantage of income protection. You can claim multiple times throughout your policy. If you recover and return to work, then later become ill again with the same or a different condition, you can make a new claim. Your policy continues until you reach the end date (usually retirement age).
What if I’m self-employed?
Income protection is especially important for self-employed people since you don’t get sick pay. You can base your cover on your average earnings over the past few years. Most insurers require evidence of your income from accounts or tax returns. We work with insurers who specialise in cover for self-employed people and contractors.
What if I have a pre-existing condition?
You can often still get cover. The insurer may exclude that specific condition, charge higher premiums, or in some cases decline cover depending on the condition. Be completely honest on your application—non-disclosure could void your entire policy. We work with specialist insurers and can often find cover for people with pre-existing conditions.
Want to see what income protection could cost?
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See what’s availableImportant Information
Income protection policies have no cash-in value at any time. If you stop paying premiums, your cover will end. The cost of your policy depends on individual circumstances including your age, occupation, health, smoking status, and the level of cover and deferred period you choose. Pre-existing conditions may be excluded or affect your premium. Policies with reviewable premiums may see increases at review dates. Always read your policy documents carefully to understand what is and isn’t covered, including any waiting periods that apply.
Albot is an introducer and technology platform, not an insurer. Applications submitted via Albot may be passed to Loan.co.uk Ltd, which provides insurance advice, carries out suitability assessments, and arranges policies with insurers. Loan.co.uk Ltd is authorised and regulated by the Financial Conduct Authority (FRN: 718486).