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Average cost of income protection insurance UK

Income protection insurance is the best and cheapest way to cover yourself against loss of earnings if you’re ill or injured. There are some brilliant benefits included with income protection insurance policies like:

  • Increased financial security for you and your loved ones
  • Peace of mind that your essential bills will be covered if you can’t work
  • Extra benefits like online GP services and return to work support

Based on our research, the average cost of income protection insurance is around £15.00 per month and most people will be covered for around 60% of their average pre-tax income.

The average cost of income protection insurance can however vary significantly based on factors such as your age, your medical history and your occupation. This is why it’s vital to do your research, shop around for the best quotes and even get some advice from an income protection specialist if you’re struggling to find a fair price.

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60-Second Summary – Average cost of income protection insurance UK

In this guide, we’ll be working hard to answer your most frequently asked questions about the average cost of income protection insurance. It’s important to note that the actual cost of your cover may vary from the average costs we describe, depending on your own situation and how much cover you need.

  • The cost of an income protection insurance policy is based on various factors such as your occupation, your age when you apply and the amount of cover that you need (£s).
  • Some easy ways to save money on your income protection insurance policy include reducing the amount of cover, comparing the best quotes across providers and speaking to an insurance expert for help and guidance.
  • if you have a high-risk job role or you are self-employed this might affect the cost of your cover and the policies that are available. It’s worth speaking to an income protection specialist to make sure you don’t end up paying more than you need to.

Something that is great about income protection insurance is that the policies are very flexible which means you can adjust the level of cover based on your own situation. This does also mean that the price can vary massively from one person to another, based on the level of cover and type of policy you need.

Income protection policies will often cost less than £10 – £20 per month and provide a vital lifeline to ensure you and your loved ones don’t struggle with money if you can’t work due to your health.

The best and easiest way to find a good price for your income protection insurance policy is to speak to an income protection specialist. A specialist advisor can help you compare policies across the market, to make sure you get an affordable policy with the right benefits and level of cover.

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Income protection insurance is a policy that is designed to pay out regularly, if you can’t work for four or more weeks due to illness or injury.

If you are signed off work by a doctor or GP, you can claim on your income protection insurance policy. You will then receive monthly payments until you either return to work or your eligible claims period runs out.

Most income protection policies will allow you to claim for anywhere between 12 to 24 months at most and some long term policies will allow you to claim indefinitely, even up to retirement age.

There are a few different elements that will go into calculating the cost of an income protection insurance policy in the UK. Every insurer will have their own pricing structure, process for underwriting their policies and different attitudes to risk.

The main points for income protection insurance pricing are:

1) Age

As with most insurance policies, your age is going to play a big part in how much you pay for your cover.

As we all get older, we are at higher risk of developing health issues, so insurers will increase the price slightly every time you have another birthday. This shouldn’t affect the price of a policy you already have though (if you have guaranteed premiums).

This is why it’s usually best to get insurance policies when you are younger, as the price will be lower.

2) Smoker status

Smokers are naturally considered to be a higher risk due to the health risks connected to smoking, vaping, and use of nicotine products.

This is the same for most types of insurance including life insurance, health insurance and critical illness cover.

Quitting or cutting back on the amount that you smoke could help you save significantly on the cost of your policy.

3) Amount of cover (£s)

Income protection insurance will cover you for anywhere between 50% to 70% of your usual pre tax income.

The level of cover available can vary depending on the insurer you choose and at minimum you should aim to cover your most important bills such as mortgage or rent payments and any essential expenses (e.g. utility bills).

As you might expect the higher the level of cover you choose, the more your policy is going to cost.

4) Type of income protection insurance

There are a few different options for policies when you’re buying income protection insurance. You can choose between:

You are likely to pay a different amount based on which of these policies you choose. For example, long term income protection insurance will generally cost more than short term cover because the policy is more comprehensive and will pay out for longer amount of time.

Guaranteed sick pay on the other hand is far cheaper and good for people on a tighter budget, but it will only pay out for six months maximum.

5) Your deferred period

If you’re not familiar with income protection you might not know exactly what a deferred period is. A deferred or deferment period is the waiting period between when you claim and when your policy begins paying out.

All income protection insurance policies will have a deferred period and usually you will be able to choose how long this is. If you can afford have savings or a workplace sick pay scheme to rely on for a while, it can often make your policy much cheaper to choose a longer deferred period.

6) Your health and medical history

Some insurers will be better than others for providing good prices for people who have medical conditions. Your general health and lifestyle can affect how much you will pay, which is where it can be most important to get the right advice.

If you’re struggling to find a fair price for your income protection insurance policy, it’s worth speaking to the income protection expert for guidance and support.

It’s very possible to find great cover even with medical conditions. In some cases, you won’t be able to claim for any sick leave from work that’s related to your medical condition(s), but you will be able to claim for other reasons.

7) The type of premiums

Your policy will either have guaranteed premiums or reviewable premiums depending on what you choose when you apply. A guaranteed premium just means that you will always pay the same price for your policy, so the cost of your cover won’t increase as you get older.

You could opt for a reviewable premium, where the insurer will reassess and adjust the cost of your policy at set intervals (e.g. annually). Any changes to the cost of your cover will be based on factors like number of claims across all customers of this insurer. These policies can be cheaper to begin with but could lead to your policy costing more long term.

Another option is to choose an age rated policy, which means that the cost of your policy will increase each year as you get older, though it is normally significantly cheaper to begin with.

8) Your occupation

As these policies are designed to protect you against loss of income, it makes sense that insurers will look at your occupation when you apply.

Insurers will consider certain types of job role more high risk (e.g. armed forces), so the cost of cover might be higher. The good news is that income protection can still be available if you have a high risk job role, if you speak to an income protection insurance specialist.

A specialist with the right background and knowledge will know exactly which insurers work best for your particular occupation, so they can find you the best deals.

One of the main things that will affect the price of income protection insurance is how much cover you need (£s). Your cover amount is the amount that your policy pays out each month while you cannot work, which works to replace your regular income.

Everyone is different and will have a different standard income and varying bills that need paying, so not everybody is going to want the exact same amount of cover. There are however a few things that you can think about before buying your policy that will help you to work out how much cover you will need.

You will need to consider:

  • Any regular expenses such as rent or mortgage payments
  • Utility bills
  • Any debts such as loans or credit card payments
  • Childcare costs
  • Average cost of essentials such as food and fuel

Essentially, you need to look at your normal monthly expenses and consider how you would pay for them if you weren’t working. If you have savings, you may choose to use these for some of the bills, but it’s very possible that that won’t cover all of them if you need extended sick leave.

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The monthly cost of income protection insurance can vary dramatically based on several factors. One of the main ones that will have an impact is the age you are when you apply.

The premiums (monthly cost) of income protection insurance will increase each year as you get older, which is why it is generally better to apply as early in the life as you can.

Below we have the average cost of an income protection insurance policy based on age. In this case, the example applicant has no medical conditions and their policy will pay out for 12 months once they begin to claim.

Average cost of income protection insurance by age

£1,500 per month (annual income £28,000) – covered to age 65

AgeLowest cost per monthHighest cost per month
20£8.48£31.09
30£12.59£41.67
40£19.70£61.44
50£36.07£103.88
60 (insured to age 67)£97.15£114.09

Note: Based on an applicant with no medical conditions, non smoker and a 1 month deferred period with guaranteed (fixed) premiums.

Another factor that can lead to higher pricing is your smoker status. Because of the health risks associated with smoking (or vaping), insurers will often increase prices slightly for smokers.

An easy way to save some money on your insurance polcies would be to cut back or quit smoking entirely. You could be looking at significant savings once you have been nicotine free for 12 months and can be classed as a non-smoker.

The below table of pricing is based on the same criteria and example customer as the table above, the main difference being these prices would apply if they were a smoker.

£1,500 per month (annual income £28,000) – covered to age 65

AgeLowest cost per monthHighest cost per month
20£12.03£48.35
30£18.03£58.88
40£29.38£80.93
50£52.81£143.38
60 (insured to age 67)£135.70£159.54

Note: Based on an applicant with no medical conditions, non smoker and a 1 month deferred period with guaranteed (fixed) premiums.

As you can see the prices for smokers can rise by as little as an extra £4 per month up to around £39 extra per month depending on age.

It’s very common in the UK to have some form of medical condition and so insurers will be used to receiving applications from people with conditions such as back pain, diabetes high blood pressure, depression and many others.

It can be harder to buy insurance policies like income protection when you have a pre-existing medical condition, especially if you don’t get the right advice.

It can also be more complicated to estimate the price you might pay, as there would be several points that insurers would consider.

  • What type of medical condition you have
  • How serious your symptoms are
  • How often symptoms occur
  • If you have needed time off work due to your medical condition
  • If your medical condition is likely to lead team meeting time off work in the future

Generally, you should still be able to get income protection insurance with medical conditions, but in some cases you might have an ‘exclusion’ applied. This means that you would be able to claim for sick leave in a variety of situations, but you wouldn’t be able to claim for any sick leave related to your medical condition.

The price of your cover will vary though, so it is worth talking to an income protection specialist if you are worried about the cost of your policy.

As a general rule, income protection insurance providers will allow you to cover anywhere between 50% to 70% of your usual pre tax income. Most of the time it will be about 60% at maximum, though this will depend on the insurer you choose.

You won’t be allowed to cover 100% of the income you usually receive (or higher), as insurers won’t want you to be better off claiming on your policy than returning to work.

Many insurers will however offer support schemes and services to help their customers return to work more quickly such as physiotherapy or counselling services.

Are income protection plans worth it?

Many UK consumers find income protection insurance policies worth it, as these policies can act as vital support if your health prevents you from working.

An income protection policy will pay out to you each month until you can return to work (or your claims period runs out). These extra funds act as a safety net, so your important bills are covered and you can focus on recovering without needing to worry.


Does income protection actually pay out?

YES – It is a myth that income protection policies won’t pay out as most of time this isn’t the case.

According to information online, income protection policies pay out on average around 90% of the time.


Which income protection insurance is the best in the UK?

There are some brilliant options for income protection insurance policies in the UK. Most of the main insurance providers will sell a variety of income protection products including insurers like:


How much does income protection cost a month?

This will vary from person to person but pricing can be very reasonable. Many people will find policies for somewhere between £8 – £20 per month, depending on their age, health and other factors.

If you want to find out how much a policy would cost for you, you should compare quotes across providers to see who can offer the best deals. It can be helpful to speak to an insurance specialist who can save you time and hassle by doing a quick comparison for you.

Everyone wants a fair price for their insurance policies and often there are some easy and simple ways that you can save money on income protection insurance. you can:

  • Reduce your amount of cover: If you have more than enough cover for all of your monthly bills, it might be worth reducing your cover for a lower price
  • Choose a different type of income protection insurance: Certain types of income protection insurance are cheaper than others. If your budget is tighter might better to look at short term income protection for example rather than long term income protection
  • Shop around: This goes for most types of insurance policies, as one of the best ways to save money will be to compare what different providers are offering to see if any stand out for offering great benefits and a lower price
  • Get expert advice: If you’re struggling to find the right policy on your own, it can often be much simpler to get some advice from an income protection specialist. An expert advisor will know which insurers specialised in this type of cover and where you’re likely to get the best price
British Insurance Broker's Association (BIBA) Logo

What to do if you can’t find income protection insurance

There are certain options and support mechanisms that are available to you if you’re struggling to find the right insurance. One of the bodies to support consumers with insurance policies is the British Insurance Brokers Association (BIBA) which covers all insurance services in the United Kingdom.

BIBA provides a Find Insurance service that allows you to search for a recommended member who might be able to help you.

Telephone (Insurance Help)- 0370 950 1790

Telephone (General Enquiries) – 0344 7700 266

Emailenquiries@biba.org.uk

It’s really important to consider all your options carefully when you’re looking to buy income protection insurance. Doing a bit of extra research and shopping around for quotes can help you save significantly on how much you pay each month.

One of the easiest ways to compare income protection insurance quotes is to speak to an income protection expert. An expert income protection insurance advisor will be able to look at the amount of cover you need, the type of policy you want and your budget to work out your best options for cover.

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Is it worth having income protection insurance?

Income protection insurance can be extremely useful and very important for anyone who is unable to work due to sickness or an injury (e.g. from an accident, sports, work etc.). Essentially, income protection insurance pays out monthly to replace any lost earnings while you are unfit or unable to work.

Payments for income protection insurance can be used to pay your mortgage, rent, other credit commitments, food bills, utilities and other regular outgoings.

Common myths about income protection insurance:

  • Income Protection Insurance won’t pay out
  • Statutory Sick Pay (SSP) from the government will cover me
  • The cost of Income Protection Insurance is high
  • People with medical conditions can't have Income Protection Insurance
  • My employer will help support me
What does income protection insurance cover?

As a rule of thumb, income protection insurance will pay out a regular monthly tax-free payment to you if you can’t work and you are signed off by a doctor. You will need to provide supporting evidence from a medical professional such as your GP and proof of income from your employer or accountant.

Example: Sarah was involved in a car accident which resulted in a serious back and neck injury that prevented her from being able to drive for 6 months. She was able to claim on her income protection policy after 4 week for the remaining 5 months until she was able to move and drive again. She would also usually be able to claim for rehabilitation and physiotherapy to help her to return to work as planned.

Do I need income protection insurance for a mortgage?

Income protection insurance and mortgage life insurance are not compulsory for getting a mortgage in the United Kingdom. Some mortgage lenders might ask for you to get insurance as a condition of the mortgage offer in some circumstances but this is rare.

It is strongly recommended to have insurance to protect you and your family if you have a mortgage and other credit commitments. If you consider what the financial impact would be if you were unable to work due to accident, sickness or injury, and even if you were to die.

Most common mortgage protection insurance policies:

  • Buildings insurance
  • Mortgage life insurance
  • Income protection insurance
  • Critical illness insurance
  • Mortgage payment protection insurance (Accident, Sickness & Redundancy
Is income protection insurance tax free?

Payments from an income protection insurance claim are almost always tax-free, apart from some business income protection policies. This is because you pay tax on the premiums for personal income protection insurance at source (i.e. the premiums are paid from your net monthly salary).

The same applies to life insurance premiums and payouts, effectively you have already paid tax on the premiums that you have paid. There are some other possible tax implications that may apply in certain circumstances so you should seek proper advice or guidance if you have any specific questions.

Which is the best income protection insurance UK?

It’s very difficult to say overall which income protection insurance policies or providers are the best, simply because there are so many different options and types of cover. You can get income protection insurance from an even wider range of insurance providers than life insurance, so your choice is even greater.

The most common income protection insurance policy is:

  • Short term income protection insurance (24 months)
  • 4-week deferred period (pays out after 1 month of absence)
  • Guaranteed premiums (fixed premiums)
  • Underwritten income protection insurance

There are several other cover options for income protection insurance (e.g. long-term, age rated, reviewable premiums, guaranteed acceptance and 0 weeks to 12 months deferred periods).

The top 5 income protection insurance providers according to research by Defaqto are:

  1. Aviva (Trustpilot score: 4.0 out of 5.0)
  2. British Friendly Society (Trustpilot score: 4.1 out of 5.0)
  3. LV= (Trustpilot score: 4.5 out of 5.0)
  4. Royal London (Trustpilot score: 4.0 out of 5.0)
  5. Shepherds Friendly (Trustpilot score: 4.3 out of 5.0)
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