Income protection is an insurance policy that covers you in case you lose your income for any medical reason. It’s a valuable kind of cover to have in place if you want peace of mind that you’ll always have money coming in, even if you can’t work.

It’s important to have this kind of cover in place if you’d be financially affected by losing your income. Most of us would face financial struggles in this scenario, because most of have financial commitments and/or dependents – and we tend to base our spending on what we know is coming in each month. If one or the only household income is suddenly missing, it can have big consequences on the household finances.

But what’s also important is being able to afford your monthly insurance premiums. Buying cover is about balancing what you need with what you can afford and are happy to pay in monthly premiums. Several factors affect the price of income protection, which will always be different per person.


What affects the cost of income protection?

The price of income protection is based on a combination of the cover you buy and several other factors relating to you – including your age, health and lifestyle. There are many variables to choose from when buying income protection cover, all of which can affect the cost – including:

  • How much cover you buy (e.g. what your monthly payments would be if you claimed)
  • How long you’re insured for (i.e. the policy term)
  • How long your waiting period is (i.e. how long you wait between losing your income and starting to receive insurance payments)
  • Whether your cover is full-term or short-term (i.e. the maximum amount of time it’d pay out for per claim)

And because income protection is a health-related insurance product, you yourself play a big part in how much it’ll cost to be insured. Insurers will want to know how much of a risk you are to insure before working out how much you should pay for cover. In particular, they’ll need to know about your age, health and lifestyle – so they’ll ask questions around your:

  • Personal health history
  • Family health history
  • Height and weight (BMI)
  • Smoking status
  • Lifestyle (e.g. hobbies)
  • Occupation

The answers you provide will tell them how much of a risk you are – or, in other words: how likely you are to make a claim on your income protection policy. They might charge more to insure someone who has an existing health condition or a higher-risk occupation (e.g. a construction job) than someone who doesn’t have any health conditions and has a lower-risk occupation (e.g. an office job).

Find out how much income protection will cost you
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Typical income protection policy prices

Based on smoking status

The following prices are based on:

  • 30-year-old male or female office worker
  • £1,500 level income protection cover until retirement (38 years)
  • 13 week waiting period
  • Own occupation incapacity basis
Insurer/product Non-smoker Smoker Anorak review
Aegon
Personal Income Protection
£34.72 £45.01 Read our Aegon income protection review
AIG
YourLife Plan Income Protection
£34.02 £54.03 Read our AIG income protection review
Aviva
Income Protection+
£26.65 £35.17 Read our Aviva income protection review
Legal & General
Income Protection
£24.39 £32.76 Read our Legal & General income protection review
LV=
Income Protection
£27.64 £35.90 Read our LV= income protection review
Royal London
Personal Menu Plan
£25.75 £36.05 Read our Royal London income protection review
VitalityLife
Income Protection
£29.89 £43.76 Read our VitalityLife income protection review

Quoted on 14/04/21

Based on age

The following prices are based on:

  • Healthy, non-smoking male or female office worker
  • £1,500 level income protection cover until retirement
  • 13 week waiting period
  • Own occupation incapacity basis
Insurer/product 25 year old (43 years' cover) 35 year old (33 years' cover) 45 year old (23 years' cover) Anorak review
Aegon
Personal Protection
£30.51 £39.91 £47.96 Read our Aegon income protection review
AIG
YourLife Plan Income Protection
£30.25 £43.27 £61.31 Read our AIG income protection review
Aviva
Income Protection +
£22.97 £32.48 £51.61 Read our Aviva income protection review
Legal & General
Income Protection Benefit
£21.62 £27.60 £50.54 Read our Legal & General income protection review
LV=
Income Protection
£22.38 £33.72 £51.67 Read our LV= income protection review
Royal London
Personal Menu Plan
£21.35 £33.03 £58.32 Read our Royal London income protection review
VitalityLife
Income Protection
£25.01 £36.21 £66.15 Read our VitalityLife income protection review

Quoted on 14/04/21


What waiting period should I choose?

All income protection policies come with a waiting period, which is the amount of time you wait between losing your income and your income protection payments kicking in. Typical insurer waiting periods are: 1, 4, 8, 13, 26 or 52 weeks. Shorter waiting periods have higher premiums and longer waiting periods have lower premiums.

What is an income protection waiting period

It can be tempting to choose a longer waiting period in order to get cheaper premiums – but you need to be sure you’d be able to cope financially in the time that you wait. People tend to tide themselves over with sick pay, savings, or financial help from someone else. Equally, if you choose a shorter waiting period because you’d need the insurance payments to kick in quickly, you need to be sure the monthly premiums will be affordable for you over the life of your policy.

How waiting period affects the price of income protection

Should I buy short-term or full-term cover?

This is another big factor when it comes to the price of your policy. The difference between the two types of cover is in the maximum amount of time they’ll pay out for per claim:

  • Short-term cover pays out for a maximum benefit period per claim – usually 1, 2 or 5 years, depending what you choose when you buy the policy
  • Full-term cover doesn’t have a maximum benefit period – it keeps paying out until you’re well enough to go back to work, or you retire/your policy ends (whichever happens first)

Both kinds of cover allow you to make multiple claims while you’re insured, even if it’s for the same illness or condition – though for short-term cover, some insurers require a minimum amount of time to have passed between claims.

The main thing to bear in mind with short-term cover is that it stops paying after the maximum benefit period even if you still can’t work – so you could be left without an income if you’re ill for longer than your payment period. For this reason, it’s cheaper than full-term cover, but can still be a very valuable (and often adequate) kind of cover to have in place if you experience periods of ill health or injury throughout your life. Both can provide a financial lifeline when you need it most, but if you can afford it, full-term cover provides the ultimate peace of mind.


  • Income protection covers you if you lose your income for any medical reasons
  • The price of income protection will be different per person because it depends on the cover you buy and how much of a risk you are to insure
  • Your age, health and lifestyle all contribute to the cost of income protection
  • Having a health condition or a risky hobby or occupation can make it more expensive to get covered
What is the average cost of income protection insurance?
The cost of income protection is highly variable depending who is buying the cover and what cover they are buying, so it’s tricky to give a reliable average. Things which affect the price include your profile (age, health, lifestyle) and many factors around the cover itself (type, term, amount, waiting period). See our guide to how much income protection costs for some typical prices.
Why is income protection so expensive?
Income protection provides very comprehensive cover if you can’t work for health reasons, as insurers will pay you a monthly income of around 50-60% of your salary. Opting for short-term instead of full-term cover can make it more affordable. Similarly, agreeing to wait longer before your income protection payments kick in will mean cheaper monthly premiums.
Is it worth having income protection insurance?
Being too sick to work can have big, long-lasting financial consequences. Income protection is worth it if you value peace of mind that long-term illness won’t damage your finances, and if the risk of not being covered is simply too great in your circumstances.
What doesn’t income protection cover?
Income protection doesn’t cover any loss of income that isn’t health-related – like redundancy or unemployment. As standard, policies cover you if you can’t work for any medical reason, though there might be an exclusion placed on your policy depending on what you disclose about your health when you take out the policy.

This post is intended for informative purposes only and does not constitute advice.