The last thing you want to be worrying about when you’re unwell is whether or not your income protection will pay out. While it’s tempting to skip the small-print and get on with the more exciting things in life, it’s important to arm yourself with the facts when buying income protection – as the chances are you’ll be relying on it financially if you become unable to work due to illness.

When you take out an income protection policy, you agree to pay monthly premiums in return for monthly payments if you need to take time off work sick. To make a valid claim on your policy, you'll need to have been signed off work by a medical professional for a physical or mental health reason. You'll also need to meet your insurer's 'definition of incapacity', which you agree to when you take out the policy. We'll explain more on this below.

Being able to claim on your income protection policy is very important – especially as the money is often used to pay for fundamental living expenses, like your mortgage or rent, monthly bills and food shopping.

What are you covered for? When can you claim?

You can claim for anything medical. With income protection, you're covered for any physical or mental health issue that causes loss of earnings, so long as you've been signed off as unfit to work by a health professional. Your claim will be successful if you meet your insurer's definition of incapacity.

What aren't you covered for? When can't you claim?

You can't claim for redundancy or resignation. Income protection doesn't cover you for loss of earnings if they haven't been caused by a medical reason. Your claim won't be successful unless you've been signed off work for a medical reason and you meet your insurer's definition of incapacity.

How long do you have to wait for payments?

If you find yourself having to take time off work due to illness or injury, you should let your insurer know straight away. That way your claim will be underway as soon as possible.

But when it comes to your payments, you're unlikely to start receiving your income protection payments straight away. This is because all income protection policies come with a ‘waiting period’ or a ‘deferred period’ –i.e. the amount of time you wait to start receiving payments.

Income protection waiting period

How long you wait will vary depending on what you choose when you buy a policy, but it can be anything from 1-52 weeks. The length of your waiting period will also affect the amount you pay each month to be insured: shorter waiting period policies have more expensive monthly premiums than longer ones.

What is your insurer's definition of incapacity?

If you do need to make a claim, you’ll need to meet your insurer's ‘definition of incapacity’. When they consider your claim, they'll assess whether or not your illness stops you from being able to work according to their definition. There’s different types of criteria, which will be made clear in your policy documents, although the most common is ‘own occupation’ definition.

What is 'own occupation' definition?

If your policy has ‘own occupation’ definition of incapacity, the insurer will assess your claim based on your inability to do the main things your current job requires. This definition offers you the highest level of income protection. For example, if you’re working in a high-pressure job and get signed off work with stress, the insurer will pay out – as opposed saying you could take another job in a less stressful position.

Other definitions judge your claim on slightly stricter criteria – for example, your inability to do any job or complete regular daily activities like walking. Find out about the other definitions in our glossary of income protection terms.

Can I claim if have a pre-existing medical condition?

It depends what was agreed when you took out the policy. If you disclose an existing health condition when you take out income protection, the insurer may or may not add an exclusion to your policy specific to the condition. If they add an exclusion, you won't be able to claim on your policy for that specific cause; if they don't add an exclusion, you'll be able to claim as normal, so long as you've been signed off work.

As ever, it's extremely important to be accurate and honest when applying for income protection cover. If a pre-existing condition is discovered during a claim but wasn't declared on application, you may invalidate your policy.

Think you need income protection? Let's work out what you need, starting with your age:
  • To claim on your income protection policy, you need to be signed off work by a medical professional
  • You should let your insurer know and submit your claim as soon as possible after you've been signed off
  • Your claim will be successful if you meet your insurer's definition of incapacity
  • You’ll start receiving your monthly income protection payments after your waiting period, which you choose when you take out the policy
What is income protection?
An insurance policy that pays a monthly amount if you can't work for any medical reason. It's designed to replace part of your missing income, so you'll always be able to cover the essentials, even if lose your income because of an illness or injury.
What does income protection cover?
An income protection policy covers you if you're unable to work and lose your income for medical reasons. This includes any illness or injury, physical or mental, that leads to you being signed off work by a medical professional.
What doesn't income protection cover?
Income protection won't cover you if you're not working for anything other than a medical reason – like redundancy or resignation. You won't be able to claim on your income protection unless you're signed off work by a medical professional.
How much does income protection cost?
The cost of cover is different per person because it depends on how much cover you buy, how quickly you'd need the policy to start paying out, and how much of a risk you are to insure (based on your age, health and lifestyle).
Will my income protection pay out?
Yes, if you meet what's known as your insurer's 'definition of incapacity' – in other words, you meet their criteria for being unable to work. This definition is based, among other things, on the job you do, and you can read it before buying the policy.