Your income is the thing that pays for everything else
Your salary covers the rent or mortgage, food, bills and the small pleasures that make life good. If an illness or an accident kept you off work for months, most of that would still need paying. Income protection replaces part of your earnings so your household can carry on while you recover.
It covers a wide range of causes. Back and joint problems, mental health conditions and long recoveries from surgery all lead to claims, and none of them would trigger a critical illness policy. That breadth is why many advisers suggest looking at income protection first.
You can also claim more than once. If you recover, go back to work and later fall ill again, the policy can pay again, as long as it is still in force. Some policies help with a phased return too, topping up your pay while you build back to full hours.
Choosing your deferred period
The deferred period is the time between stopping work and your first payment. Common options run from four weeks up to a year. A longer wait makes the premium cheaper, so the trick is to match it to the support you already have.
If your employer pays full sick pay for six months, a six-month deferred period may suit you. If you are self-employed with little savings, a short wait could make more sense. Statutory sick pay alone is a modest sum and runs for a limited time, so it rarely covers a household's outgoings.
- Check your contract to see what your employer pays and for how long
- Count the months your savings could cover your essential bills
- Pick a deferred period that starts when that support runs out
Short-term or long-term cover
Long-term income protection pays until you return to work, reach the end of the policy or retire, however long that takes. It offers the fullest protection, and it costs more as a result. Most people set the end date at their expected retirement age, so the cover lasts for their whole working life.
Short-term policies limit each claim to a set period, often one, two or five years. They cost less and can work well for people who want a safety net for most common absences. The risk is a serious illness that lasts longer than the payment period. We will explain both so you can weigh cost against cover.
The definition of incapacity
Every policy says what counts as being unable to work. The strongest definition is own occupation: the policy pays if you cannot do your own job. Weaker definitions pay only if you cannot do a similar job, or any job at all, which makes a claim harder.
Insurers do not offer own occupation cover for every role, and some manual jobs carry restrictions. We look for the best definition available for your work and point out the difference in plain words, because this detail can matter more than a small saving on the premium.
How much you can insure
Insurers cap the monthly benefit at a share of your earnings, so you have a reason to return to work when you can. The cap usually sits below your full pay, and it may take account of any other income you would receive while off sick.
For employees, insurers look at salary and regular bonuses. For the self-employed and company directors, they usually look at recent accounts or tax returns, and directors may include dividends. Keep your paperwork handy, because the insurer will check your earnings at claim time.
You can choose a level benefit or one that rises each year with inflation. An increasing benefit helps your cover keep its value over a long policy. Some insurers also offer guaranteed premiums, which stay fixed, or reviewable ones, which start lower and can change later. We will explain the choice before you commit.
How Hi Tomorrow helps
Income protection has more moving parts than most cover, and the cheapest quote can hide a weaker definition or a short benefit period. We take time to understand your job, your sick pay and your savings, then recommend the deferred period and policy type that fit.
We compare the insurers on our panel for your occupation, explain any exclusions they propose and help you with the medical questions. Many policies also include extras such as rehabilitation support and access to a remote GP, and we will tell you which ones come with each option.