Income Protection Insurance: Is it right for you?
Posted 13th August 2025 by Kenzie Sharp
What is Income Protection?
Income protection is a type of insurance policy that is designed to protect you in the event of you needing replacement income if you have issues with your health such as injuries or illness. If you are concerned about the impact of losing income on your family’s lifestyle, this type of policy offers peace of mind for those unpredictable moments life might bring. The main goal of income protection is to replace a chunk of your income, so you can continue covering essential expenses like mortgage or rent payments, utility bills, and daily living costs.
These policies can often be tailored to fit your needs, you can typically choose the waiting period, which is the time you must be unable to work before benefits begin, ranging from a few weeks to several months, however this depends on your insurer. This allows you to align the policy with your financial situation, such as any company sick pay entitlement, and savings. Plus, you can decide on the benefit period, which is how long you’ll receive payments. It could be a short-term fix lasting a few years, or it might extend all the way to retirement age.
Income protection usually covers a significant percentage of your pre-tax income, often between 50% and 70%. This amount provides enough financial support while encouraging a return to work when possible. Different policies may offer various terms and conditions, with some including additional benefits like rehabilitation services or support for returning to work.
The cost of premiums varies based on factors such as age, health status, occupation, and the level of coverage chosen. Premiums might be easier on the wallet if you opt for longer waiting periods or shorter benefit spans. If you have an income protection policy in place it can provide you some security against life’s surprises and it complements other forms of insurance, any savings you might have and any sick pay benefits from your employer, helping to provide a safety net so you can focus on getting better without the added worry of the monthly bills and lost income. Income protection isn’t just about peace of mind; it’s about being proactive and responsible.
Is Income Protection Insurance Worth It?
When it comes to income protection there is a range of positives and negatives, like any policy, and it is really about the specifics and how they align with your lifestyle. Look at some of the positives and negatives to income protection below:
| Positives | Negatives |
| Financial Security
Income protection provides a regular monthly benefit if you’re unable to work due to illness or injury, helping you maintain your standard of living and meet financial obligations like mortgage payments and daily expenses. |
Exclusions and Limitations
Some policies often come with exclusions such as pre-existing conditions and may not cover all injuries or illnesses so make sure to check what your policy covers so there are no surprises. |
| Peace of Mind
Knowing you have a safety net in place can reduce stress and anxiety during challenging times, allowing you to focus on recovery. |
Potential Delays
The waiting period before benefits kick in can be a straining time on finances, so it is important to consider this when choosing your waiting period and consider any workplace sick pay or savings when making your decision. |
| Customisable Coverage
An income protection policy can be tailored to your needs, such as the waiting period, to help align with any existing benefits you have such as company sick pay. Depending on the insurer you may be able to make changes to sum assured if get a promotion at work for example. You should read your policy documentation to understand what changes can be made. |
Varied Coverage Amount
The percentage of income that is covered is usually between 50 – 70% meaning that it will not replace your full income, something to consider when deciding if an income protection policy will meet your financial needs and objectives. |
| Long Term Support
If needed some income protections policies can provide long term support depending on your illness or injury and the period of time you are predicted to be unable to work. Some even until retirement age. |
Complexity
It can be difficult to understand the terms and conditions of your potential policy, and it requires careful consideration to ensure it is the right fit for you, if you are unsure we suggest you speak to an independent financial advisor. |
What lifestyle & person would income protection be beneficial for?
Income protection is worth considering for someone who is employed and working 16 hours or more per week and is looking to fill the gap when employer sick pay ends or you’re on statutory sick pay, especially when it comes to solid financial planning. Finding the best income protection for you can be difficult, but if you’re the main breadwinner in your family, having this safety net can make all the difference. Whether you’re supporting kids, a stay-at-home partner, or other dependents, it ensures you can keep the household running smoothly if you ever face prolonged illness or injury.
Income Protection for High Earners:
High earners could also find income protection particularly beneficial. With significant financial obligations, the pressure can be immense if you’re suddenly unable to work. Income protection provides a form of stability, allowing you to maintain your lifestyle even when things don’t go as planned.
Income Protection for Self Employed:
For those who are self-employed or run their own business, income protection could be a lifesaver. Unlike employees, you might not have the same perks as sick pay. Income protection could help you sustain your standard of living during tough times when you find yourself unable to work due prolonged illness or injury. It’s all about peace of mind, knowing you’re covered even if life throws a curveball.
Income Protection for You:
Whether you’re the main breadwinner, self-employed, or simply want to ensure you and your family are covered, it provides a crucial safety net to maintain financial stability during health-related work interruptions, with its customisable nature allowing you to tailor the policy to suit your specific needs and lifestyle.
When considering income protection as a means to provide financial security, it can feel intimidating, but with Protect Line we can give you all the facts so you can make an informed decision about what fits you and your needs best.
If you are ready to start looking for a tailored income protection quote for you, then speak to one of our specialists today at 0333 880 3030.
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