How much does income protection insurance cost in the UK?
What is income protection insurance and what should you consider before buying it? Find out in our handy guide.
Thinking of taking out income protection insurance?
Find out how much it will cost and what will affect the price of your premiums.
Income protection insurance offers a replacement salary if you cannot work due to illness or disability.
Many factors can impact the cost of income protection, including your age and health.
A qualified insurance broker can help you find the right policy for you.
What is income protection insurance?
Income protection insurance provides a replacement 'salary' when you cannot work due to illness or disability.
Unlike critical illness insurance, which pays a lump sum, income protection insurance pays between 50% and 70% of your income, usually every month, until you are well enough to return to work or your cover ends.
Some policies are short-term and will pay out for a maximum of one to five years, while others are long-term and can continue until you reach retirement age.
The best income protection policies will pay out when you can’t do your specific job, while others will only pay out if you can’t work at all.
‘Own occupation’ policies are usually the preferred choice, but they are more expensive.
Learn more: Income protection vs critical illness: what's the difference?
What affects the cost of income protection insurance?
There are a range of factors that can affect the cost of your income protection insurance:
Your job
If you choose a policy that pays out if you can no longer work in your current role or field, your premium will be higher than it would be if you were only covering not being able to work.
Policies will also be more expensive if your job carries a higher risk of injury or accident.
The length of your policy
The longer the potential payout period on your policy, the more expensive it’s likely to be.
This is why policies that only pay out for one or two years are the most affordable.
The length of your deferred period
This is the time you will need to wait before you can make a claim after you have stopped working.
The longer you can manage before payments start, the cheaper your insurance will be.
Your age
The older you are, the more you’ll pay.
As with health insurance, the risk of illness and the chance of needing to claim increase with age.
Your health
The healthier you are, the less you usually pay, just as with health insurance.
Your hobbies and lifestyle
Any risky hobbies or lifestyle factors can increase costs.
How much does income protection cost?
Narrowing down the cost of income protection insurance isn’t easy.
What you pay is affected by many factors, from the level of coverage to your health and lifestyle.
Cover starts at less than £10 a month, but the price you will need to pay for income protection will depend on many factors.
So, for example:
The impact of age
At the age of 25, the average cost for a monthly income of £30,000 would be £10.17 per month, according to Reassured.
By 40, this would increase to £19.56, reaching £43.74 a month at age 50.
This is based on a three-month deferred period for a healthy non-smoking office worker, with cover running until age 65.
The length of cover
At age 25, the cost falls to £6.14 a month for an office worker if the payment period is limited to one year, or £8.60 for a 40-year-old.
Occupation
The riskier your job, the more expensive your income protection premiums will be.
A 25-year-old in a manual occupation (such as a painter and decorator) would pay more than an office worker.
Their premiums would start at around £10 a month for a payment period of one year, compared to £6.14 for an office worker of the same age with a similar policy.
Finding the best income protection policy
Finding the best income protection policy involves some research to make sure you choose the right one for you. However, an insurance broker can help you find the right policy.
Below are a few of the highest-rated income insurance providers and the average payout rate.
| Income protection insurance provider | % average payout in 2024 |
|---|---|
| Shepherds Friendly Society | 96% |
| LV | 90% |
| Aviva | 90.1% |
| Royal London | 86.8% |
Each provider will typically offer its own choice of deferred periods, payment periods and maximum income percentages, so it’s worth shopping around and considering what will best suit you.
When you’re looking for affordable income protection cover:
Act as soon as possible - costs will only increase with age.
Check whether the policy covers you for temporary and permanent disability, as well as terminal illness.
Confirm whether your provider and policy will cover any pre-existing conditions.
Look at getting a policy with a guaranteed premium that will not go up over the years.
Learn more: The benefits of using an insurance broker
Is income protection insurance worth it?
The Financial Conduct Authority’s Financial Lives Survey (2024) found that only around 6% of people in the UK have income protection insurance.
Only you can determine whether this insurance is worth the monthly expense. However, before you make a decision, it’s worth thinking about how you would pay the bills if you were off sick for an extended period of time.
It may be particularly important if you are self-employed and not entitled to sick pay.
Get expert financial advice
It can be difficult and take time to find the right income protection policy that suits your own personal circumstances.
If you’re struggling to decide and need advice, Unbiased can connect you with a qualified insurance broker who can help you make the right choice for you and your family.
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