Income Protection Calculator (UK)
Calculate appropriate income protection cover based on your earnings, fixed outgoings, and existing protection. Indicative figures only.
Income Protection Guide (UK)
What Income Protection Is
Income protection (IP) pays a tax-free monthly income if you cannot work due to illness or injury. Continues paying until you can return to work, the policy ends (usually age 65-68), or you die. Significant difference from critical illness cover: IP pays a regular income (replaces wages) whereas CIC pays a one-off lump sum on diagnosis of specified conditions. IP covers any inability to work — not a list of specified illnesses. Long-term IP: pays until retirement age or recovery, whichever first
Deferred Period
Deferred period: the wait between becoming unable to work and payments starting. Common deferred periods: 4 weeks, 8 weeks, 13 weeks, 26 weeks, 52 weeks. Longer deferred period = much lower premium. Premiums roughly halve when going from 4 weeks to 26 weeks. Choose based on: how long can you cover yourself without IP payments? Emergency savings + employer sick pay = covered period. If employer pays 13 weeks full sick pay and you have 3 months expenses saved: 26-week deferred period bridges natur
Benefit Level
Maximum monthly benefit insurers will pay: typically 50-65% of gross income (some insurers up to 70%). Why capped: insurers want to incentivise return to work — too high a benefit creates moral hazard. Aim for net income replacement. IP payouts are tax-free (paid from premiums you've paid from net income). So 50% of gross income often roughly equals 65-70% of net take-home pay — close to maintaining living standards. Choose what you can afford to pay premiums on, balanced against essential outgo
Premium Cost Drivers
Same factors as critical illness cover, plus: occupation rated more carefully for IP (since occupation directly affects claim probability). Lower-risk office-based jobs: cheapest premiums. Manual trades, healthcare, emergency services: higher premiums. High-risk occupations (offshore, certain medical specialties): may need specialist insurers. Indicative monthly premiums for £2,000/month benefit, age 35, non-smoker, 13-week deferred period, to age 65: clerical/IT/management work: £25-45/month. H
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