What income protection covers

Income protection insurance pays a regular, usually monthly, income (typically a percentage of your normal earnings, often around 50–70%) if you're unable to work due to illness or injury, continuing until you return to work, retire, reach the end of the policy term, or die — whichever comes first.

How it differs from critical illness cover

Income protection pays out for any illness or injury preventing you from working (as defined by the policy), for as long as you remain unable to work, rather than requiring a specific diagnosed condition from a defined list. Critical illness cover, by contrast, pays a one-off lump sum, but only for specifically listed serious conditions.

Own occupation vs any occupation definitions

Policies vary in how strictly they define "unable to work" — an "own occupation" definition pays out if you can't do your specific job (relevant for skilled or specialised professions), while an "any occupation" definition only pays out if you can't do any job reasonably suited to your skills and experience, a considerably higher bar to meet.

How it interacts with sick pay

Most employers provide contractual or statutory sick pay for a limited period, after which income can drop sharply or stop entirely. Income protection is designed to pick up where employer sick pay runs out (via a chosen "deferral period," covered in our separate guide), rather than duplicating it from day one.

What affects the cost

Premiums depend on your age, health, occupation (higher-risk jobs cost more to insure), the deferral period chosen, how long the policy pays out for, and the "own occupation" vs "any occupation" definition selected — a stricter definition and shorter deferral period both increase cost.

Key takeaways

  • Income protection replaces a portion of income for any qualifying illness or injury, for as long as you're unable to work.
  • It differs from critical illness cover, which pays a lump sum only for specifically listed conditions.
  • "Own occupation" definitions are more generous, and more expensive, than "any occupation."
  • It's designed to start once employer sick pay ends, not to duplicate it.