Income protection insurance covers you if you can't work because of illness or injury. It makes sure you receive a regular income until you retire or return to work.

Also known as permanent health insurance, income protection insurance is different from critical illness cover, which pays out a lump-sum for a life-threatening illness.

To find the cheapest policy for the cover you need, compare quotes from as many income protection insurers as possible.

When you apply, give accurate information about yourself, otherwise you could invalidate your policy, e.g. you say you have never smoked but this is untrue.

What types of income protection insurance are there?

Most policies are split into short term and long-term policies. A short-term policy can cover you for involuntary redundancy but it's normally limited to a set time period.

Long-term income protection insurance usually covers you until you return to work, retire, pass away or until the policy ends.

Other types of policies include:

  • Guaranteed policies: These policies have fixed monthly premiums so you know exactly what you'll have to pay each month.

  • Reviewable policies: These let you change your cover after a set term.

  • Age-related policies: Premiums for age-related income protection policies increase as you get older. But your occupation or lifestyle has no effect on your premium.

Do you need income protection insurance?

Calculate your monthly expenses and think about how you would cover those costs if you lost your income. If you can't afford to pay your bills, then income protection insurance is worth considering.

It can be especially useful if you're self employed, a freelancer or contractor, and don't have benefits such as sick pay.

How do you find the best income protection insurance?

The best income protection insurance policy will:

  • Give you the income cover you need

  • Cover you for the length of time you want

  • Offer the cheapest monthly premiums

To find the cheapest policy, compare quotes from as many income protection insurers as possible.

When you apply, give accurate information about yourself, otherwise you could invalidate your policy, e.g. you say you have never smoked but this is untrue.

How do you find the best income protection insurance?

Income protection insurance policies can cost as little as £10 per month to over £80 per month.

The cost of any income protection insurance policy will depend on your individual circumstances and what you're looking for such as:

  • Age: It's more likely that your premium will be higher the older you are.

  • Length of the policy: The cost will vary depending on you how long the policy covers you for.

  • Level of maximum cover: Some policies may only cover illness and injury, while others may include unemployment as well. This will affect the cost of your policy.