Income Protection Insurance

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What is income protection insurance?

Income protection insurance does exactly what it says – it replaces your income if you can’t work due to illness, injury, or involuntary unemployment. But rather than “replacing” your income, it’s really about protecting it from unexpected loss.

Imagine you break your leg on a Sunday – would you be fit for work on Monday? Probably not! And you shouldn’t have to worry about money while recovering. That’s where income protection comes in. Also known as ASU, it provides monthly payouts to cover essentials like rent, bills, and household costs, so you can focus on getting back on your feet.

Income Protected

Your income is safe even when you can't work.

Why is income protection insurance important in the current UK job market?

Rising Redundancies: The ONS reports redundancies were on the rise by the tail-end of 2024, making job security less certain.

Harder Job Market: It has been getting harder to find a new job in recent years, leaving people out of work more unstable.

Sick Days at a High: Worker sick days rose in 2022 to their highest rate since 2004.

Up to 65% Income Cover: If you lose your job or need time off due to injury or illness, we will pay up to 65% of your monthly income.

What’s the difference between income protection insurance, redundancy protection insurance, and critical illness insurance?

Redundancy protection insurance covers you if you’re made redundant, providing up to £2,500 per month until you find a new job.

Critical illness insurance pays a lump sum (up to £300,000, depending on the policy) if you’re diagnosed with a listed critical illness, helping with treatment and living costs.

Income protection insurance combines elements of both, offering up to £2,500 per month if you lose your job involuntarily or need time off due to illness or injury.

How do I apply for income protection insurance?

There are a few different ways to apply for income protection insurance, but before you start, your best bet would be sitting down to figure out exactly what you need from your policy. Have a look at your finances — your income and your outgoings — and make a note of how much you’d need to keep up with your obligations. That amount is the benefit amount you want to look for. You should also figure out how long you think you could rely on your savings for, because that’ll affect how long your excess period should be. Once that’s done, you can either get in contact with Best Insurance through our website to get a quote, or you can give us a call on 0330 330 9465 and we’ll search the market for you. As part of the application process, you’ll have to answer some questions — your employment and medical histories are common lines of inquiry, as are questions about your lifestyle — and select your preferred excess period, but once that’s done, your policy should be set up for you.

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How much does income protection insurance cost?

Your age

with higher premiums for older policyholders

Your job

for example, someone who works in a high-risk job like construction would pay more than someone who works a job that’s comparatively lower-risk

Your salary

this affects how much money you could claim a month, which affects what you have to pay to keep your cover

Your health

you might pay more if you smoke, for example, and pre-existing conditions will always be excluded

Your lifestyle

if you go skydiving on your weekends, for example, you’ll probably pay more than someone who doesn’t

The length of your excess period

with shorter excess periods costing more and longer ones costing less

Income protection insurance is purchased directly from an insurer or through a broker, with regular premiums paid to keep the policy active. Once set up, there's usually a waiting period (also called the elimination period) before benefits begin – this can range from a few weeks to several months. After that, the insurer provides regular income payments if you're unable to work due to illness or injury, for as set benefit period that could last for a few years or until retirement, depending on your plan.

Excess periods

If you need to claim on your income protection insurance policy, you’ll receive up to £2,500 a month (or 65% of your income), completely tax-free.

Excess periods

This is the waiting time between claiming and getting paid. Most people choose a 30-day excess period, but the choice is yours.

Claim Your Insurance

To file an income protection insurance claim, contact your claim administrator immediately using the details in your policy. They’ll guide you through the process, including forms and required documents. Claims typically take around 30 days; if delayed, follow up with your insurer. For excessive delays or unfair denials, escalate to the Financial Ombudsman Service.

Useful Links

Short Term Income Protection Plan Long Term Income Protection Plan Life Insurance Time Limited Pet Insurance

Accident only pet insurance Mortgage Protection Insurance Mortgage Protection for Unemployment Understanding the Basics of Unemployment Insurance

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