Income protection insurance explained
Income protection pays a regular replacement income if illness or injury stops you working. Here’s how it works, the deferred period, and how it compares to sick pay.
On this page
Income protection answers a simple, scary question: if you couldn’t work for months, how would the bills get paid? Here’s how the cover works.
What it does
It pays a regular, tax-free income (a percentage of your usual earnings) if illness or injury stops you working — continuing until you recover, go back to work, retire, or the policy term ends.
The deferred period
Why it exists: the sick-pay gap
Not the same as critical illness
| Income protection | Critical illness | |
|---|---|---|
| Pays | Regular income while unable to work | One lump sum for a listed serious illness |
| Triggered by | Any illness/injury that stops you working | Diagnosis of a specific listed condition |
In short
Income protection replaces part of your income if illness or injury stops you working, after a deferred period you choose, until you recover or the policy ends. It exists because Statutory Sick Pay (a low amount for up to 28 weeks) rarely covers a family’s bills — and unlike critical illness cover, it pays a regular income rather than a lump sum.
Frequently asked questions
How is income protection different from critical illness cover?
Income protection pays a regular income while you’re unable to work due to any illness or injury; critical illness pays a single lump sum for specific listed serious illnesses. They cover different risks and some people hold both.
What is the deferred period?
It’s the waiting time between becoming unable to work and payments starting — often 4, 13, 26 or 52 weeks. A longer deferred period lowers the premium; choose one that fits your savings and any employer sick pay.
Isn’t sick pay enough?
For many families, no. Statutory Sick Pay is a relatively low fixed weekly amount payable for up to 28 weeks. If your household relies on your income, that gap is exactly what income protection is designed to fill.
Sources & last checked
- Income protection insurance — MoneyHelper (Money & Pensions Service)
- Statutory Sick Pay (SSP) — GOV.UK
Last checked against official sources: 9 July 2026.