Critical Illness Cover7 min read
Critical illness cover vs income protection
How critical illness cover and income protection differ in the UK, what each is designed to solve, and whether you may need one or both.
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Workers will be off work for 6+ months before retirement
Up to 70%
Of your income can be protected tax-free
Any Illness
Covers any condition that stops you working
What is income protection insurance?
Income protection insurance pays you a regular monthly income if illness or injury prevents you from working. It's designed to replace your salary so you can continue paying your bills.
Unlike critical illness cover which only pays for specific conditions, income protection covers any illness or injury that stops you doing your job - including common issues like back problems, stress, and depression.
- Mortgage or rent payments to keep your home
- Household bills - energy, water, council tax
- Food and everyday living expenses
- Car payments and transport costs
- Childcare and school costs
- Loan and credit card repayments
Do You Need Cover?
Who Should Consider Income Protection?
According to Which?, income protection is the one insurance product every UK working adult should consider.
Self-employed workers
No employer sick pay means no income if you can't work. Income protection fills this critical gap.
Main household earner
If your family depends on your income, protecting it protects their lifestyle and security.
Limited sick pay
If your employer only offers statutory sick pay or short-term cover, you need long-term protection.
How It Works
How Does Income Protection Work?
Understanding the key features helps you choose the right policy.
Deferred Period (Waiting Period)
How long you must be off work before payments begin - typically 4, 8, 13, 26, or 52 weeks.
Tip: Match your deferred period to your savings and employer sick pay.
Benefit Amount
Cover 50-70% of your gross income. Payments are tax-free, so 60% often equals your normal take-home pay.
Tip: Consider policies with benefits that rise with inflation.
Occupation Definition
This determines when you're considered "unable to work":
- Own occupation: Can't do your specific job (best)
- Suited occupation: Can't do your job or similar
- Any occupation: Can't do any job (hardest to claim)
Policy Term
Policies can run until retirement age (65 or 68). If you claim, payments continue until you recover, retire, or the policy ends.
Tip: Choose a policy that runs until your planned retirement age.
Understanding the Difference
Income Protection vs Other Insurance
How does income protection compare to other types of cover?
Income Protection
- What triggers a claim?
- Any illness/injury stopping work
- How does it pay?
- Monthly payments
- How long do payments last?
- Until you recover or retire
- Can you claim multiple times?
- Yes, unlimited claims
- Best for:
- Replacing lost income
Critical Illness
- What triggers a claim?
- Specific serious illnesses only
- How does it pay?
- One-off lump sum
- How long do payments last?
- Single payment, policy ends
- Can you claim multiple times?
- Usually once only
- Best for:
- Large one-off costs
Life Insurance
- What triggers a claim?
- Death or terminal illness
- How does it pay?
- One-off lump sum
- How long do payments last?
- Single payment to beneficiaries
- Can you claim multiple times?
- Once only (on death)
- Best for:
- Family protection after death
| Income Protection | Critical Illness | Life Insurance | |
|---|---|---|---|
| What triggers a claim? | Any illness/injury stopping work | Specific serious illnesses only | Death or terminal illness |
| How does it pay? | Monthly payments | One-off lump sum | One-off lump sum |
| How long do payments last? | Until you recover or retire | Single payment, policy ends | Single payment to beneficiaries |
| Can you claim multiple times? | Yes, unlimited claims | Usually once only | Once only (on death) |
| Best for | Replacing lost income | Large one-off costs | Family protection after death |
A comprehensive protection plan often includes all three types of cover working together.
What Does Income Protection Cover?
Income protection covers any illness or injury that prevents you from working - there's no specific list of conditions like with critical illness cover. This includes:
- Mental health - anxiety, depression, mental health conditions
- Musculoskeletal - back problems, joint issues, injuries
- Physical illness - cancer, heart conditions, long COVID
- Accidents - broken bones, recovery from surgery
- Chronic conditions - conditions requiring ongoing treatment
Note: Pre-existing conditions may be excluded. Mental health claims often require more evidence, but are commonly paid - mental health issues are one of the top reasons for income protection claims in the UK.
Understanding Premiums
What Affects the Cost of Income Protection?
Your Occupation
Higher-risk jobs (manual work, construction) cost more than low-risk office jobs. Your occupation also affects which definition type you can get.
Deferred Period
A longer waiting period (e.g., 26 weeks vs 4 weeks) significantly reduces your premium but means longer before payments start.
Your Age
Younger applicants pay less. The risk of illness increases with age, especially for long-term conditions.
Your Health & Smoking Status
Pre-existing conditions and smoking increase premiums. Being honest ensures your claims will be paid.
Benefit Amount
Higher monthly benefit amounts mean higher premiums. Most people insure 50-60% of their income.
Premium Type
Guaranteed premiums never change. Reviewable start cheaper but can increase. Age-banded rise at set ages.
Simple Process
How to Get Income Protection
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Knowledge Centre
Income protection guides
Helpful articles on sick pay, policy benefits, and when income protection may be worth considering.
Income Protection6 min read
Does income protection cover mental health?
How UK income protection treats mental health conditions, what underwriting may apply, and the policy details that matter most.
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Income Protection7 min read
Income protection vs sick pay
How UK income protection compares with employer sick pay and Statutory Sick Pay, and when extra cover may be worth considering.
4 sources
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FAQ
Income Protection FAQs
Common questions about income protection insurance in the UK
What is income protection insurance?
Income protection insurance pays you a regular monthly income if you're unable to work due to illness or injury. Unlike critical illness cover which pays a one-off lump sum for specific conditions, income protection covers any illness or injury that prevents you from doing your job, and pays out monthly until you recover, reach retirement, or your policy ends.
How much of my income can I protect?
Most income protection policies cover between 50-70% of your gross income. Insurers cap this amount to ensure you have an incentive to return to work. Some policies also include benefits that increase with inflation, helping maintain your standard of living if you claim for an extended period.
What's the difference between income protection and critical illness cover?
Income protection pays a regular monthly income for any illness or injury that stops you working, and continues until you recover or retire. Critical illness cover pays a one-off lump sum only if you're diagnosed with a specific serious illness on the policy's list. Many people benefit from having both types of cover.
What is a deferred period and how does it affect my premium?
The deferred period (or waiting period) is how long you must be off work before payments begin - typically 4, 8, 13, 26, or 52 weeks. A longer deferred period means lower premiums because you're more likely to return to work before payments start. Choose a deferred period that matches how long you could manage without income using savings or sick pay.
What's the difference between 'own occupation' and 'any occupation' cover?
Own occupation pays out if you can't do your specific job - this is the best cover. Suited occupation pays out if you can't do your job or a similar one matching your skills. Any occupation only pays out if you can't do any job at all - this is the cheapest but hardest to claim on. We recommend own occupation cover where possible.
Is income protection worth it if I'm employed?
Yes, because statutory sick pay (SSP) is only around £116 per week for up to 28 weeks. While some employers offer better sick pay, it often reduces over time and may only last 3-6 months. Income protection provides long-term security if you're off work for extended periods due to serious illness or injury.
Is income protection insurance suitable for self-employed people?
Absolutely - in fact, it's arguably more important for self-employed people. If you can't work, you likely have no income at all. You won't qualify for statutory sick pay, and there's no employer to fall back on. Income protection ensures you can still pay your bills while you recover.
Can I claim on income protection more than once?
Yes, unlike critical illness cover which typically pays out once, you can make multiple claims on an income protection policy throughout its term. Each time you're unable to work due to illness or injury, you can claim again (subject to the deferred period each time).
Are income protection payments taxable?
No, income protection payments are completely tax-free if you pay the premiums yourself. This is because you've paid for the policy with money that's already been taxed. If your employer pays the premiums as a benefit, the payments may be taxable.
What conditions are covered by income protection?
Income protection covers any illness or injury that prevents you from working - there's no specific list of conditions like with critical illness cover. This includes mental health conditions like stress, anxiety and depression, back problems, musculoskeletal issues, and recovery from accidents. However, pre-existing conditions may be excluded.
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