Have you ever stopped to think what would happen if you couldn’t work due to illness or injury? For many people across the UK, the answer is unsettling.

With Statutory Sick Pay (SSP) currently just £118.75 per week (as of 2025), it’s no surprise that more and more individuals are turning to income protection insurance to keep their financial lives stable during periods of illness.

In this blog, we’ll explore what income protection is, how it works, who it’s for, and why it’s a vital part of any well-rounded protection plan.

What Is Income Protection Insurance?

Income protection is a type of insurance policy designed to replace a percentage of your income if you are unable to work due to illness or injury.

Typically, income protection policies pay out between 60% and 70% of your gross salary, providing you with regular monthly payments until:

• You are well enough to return to work
• The policy term ends
• You reach retirement

Unlike life insurance or critical illness cover which pay a one-off lump sum, income protection pays a monthly income, helping you stay on top of everyday bills and commitments while you recover.

Why Is Income Protection So Important?

Let’s put it into perspective.

Quick question:

Could you afford to live on just £118.75 per week?

For most people in the UK, the answer is a clear no. Mortgage or rent, council tax, food, energy bills, and other household expenses would far exceed this amount, especially for families or homeowners.

Many employers offer limited sick pay, and once that runs out, you may be left relying on SSP alone. If you’re self-employed, you may not even qualify for SSP at all.

That’s where income protection steps in. It provides a financial safety net when you need it most, allowing you to focus on getting better, rather than worrying about how to pay the bills.

How Does Income Protection Work?

Income protection policies are customisable, making them flexible and suitable for a wide range of circumstances.

Key features include:

• Monthly tax-free payments of up to 70% of your salary
• Deferred period you choose (e.g. 4, 8, 13, or 26 weeks)
• Claim multiple times over the life of the policy
• Payments continue until you return to work, the policy ends, or you retire

For example:

If you earn £35,000 per year, you could receive up to £2,041 per month if signed off sick by your GP.

This can make the difference between keeping up with household costs or falling into financial hardship.

What If I Don’t Qualify for a Medically Underwritten Policy?

If you have a pre-existing medical condition or a high-risk occupation, you might worry about being accepted for a traditional income protection plan. But there are alternative solutions.

Income Benefit Policies

• Not medically underwritten
• Not linked to your income
• Pays out a fixed benefit of up to £2,500 per month
• Covers you for up to 3 months per claim
• Payments can start from just 14 days off work

These plans are ideal for individuals who need basic financial protection but want to avoid a lengthy medical assessment.

Who Should Consider Income Protection?

Income protection is suitable for almost anyone, but especially if you:

• Are self-employed with no employer sick pay
• Only receive SSP from your employer
• Have financial responsibilities like rent, mortgage, or children
• Are a single person with no second income
• Want long-term protection against income loss

Many people assume that critical illness or life cover is enough. But neither of those policies will support your monthly living costs if you’re off work due to a non-critical but long-term illness or injury.

Key Benefits of Income Protection

Replaces up to 70% of your income
Covers any illness or injury that prevents you from working (as signed off by your doctor)
Choose your own deferred period and term
Claim multiple times
Reduces financial stress during recovery
Supports your mortgage or rent payments, bills, and living costs

Frequently Asked Questions (FAQs)

Is income protection worth it in the UK?

Absolutely. With SSP so low and sick pay often limited, income protection ensures financial stability when you’re unable to work. It’s particularly valuable for those without savings or employer support.

How much does income protection cost?

The cost of a policy depends on your age, health, occupation, deferred period, and benefit amount. The younger and healthier you are when you take out a policy, the cheaper your premiums will be.

Can I claim more than once?

Yes. Unlike critical illness insurance, income protection allows for multiple claims throughout the policy’s lifetime as long as you meet the claim conditions each time.

Final Thoughts: Protect Your Income, Protect Your Future

Being unable to work due to illness or injury is stressful enough. The last thing you want to worry about is falling behind on rent or bills.

Income protection offers long-term peace of mind, replacing a large portion of your income so you can focus on what truly matters: your recovery and your wellbeing.

If you’re self-employed, a family provider, or simply someone who wants to prepare for life’s uncertainties, this is one policy you shouldn’t overlook.

You may also be interested in: Is Income Protection Worth It? A Simple Guide for UK Workers