Income Protection Calculator

Income protection insurance pays a regular monthly income if you are unable to work due to illness or injury. Policies typically cover 50-70% of your gross income, a cap insurers apply to prevent over-insurance and to keep some incentive to return to work. Unlike critical illness cover, which hands over a lump sum on diagnosis, income protection pays out for any condition that stops you working rather than a named list. Payments run until you recover and go back, or until retirement, the end of the policy term, or death, whichever comes first.

The deferred period, meaning the wait between falling ill and the first payment, moves the premium more than almost anything else you choose. A 4-week deferred period is the most expensive, while a 6-month or 12-month deferral can halve the cost. The sensible approach is to match the wait to whatever already covers you. NHS staff get six months on full pay followed by six months on half pay, the most generous sick pay in the country, which fits a 12-month deferral. Private schemes vary wildly and often stop at Statutory Sick Pay, pointing to 1-3 months. Self-employed people have no employer cover at all.

Statutory Sick Pay is the floor most employees fall back on, and it is a low one. For 2026/27 it pays £123.25 a week, roughly £534 a month, for a maximum of 28 weeks. Since April 2026 every employee qualifies from the first day of sickness with no minimum earnings test, although lower earners receive 80% of their normal pay where that is less. That is well below most households' outgoings, and plenty of people only discover the gap once illness arrives. Universal Credit and PIP cover the longer term, but both are slow to arrange, and only Universal Credit is means-tested.

Underwriters price the risk from your age, health and job. Each year over 35 adds roughly 8-12% to the premium, smoking adds 50-80%, and a BMI of 30 or above adds 20-50%. Occupation is banded from Class 1 for office work, the cheapest, up to Class 4 for manual trades, which can cost 2-4 times as much. Hobbies such as skiing, scuba diving and motorcycling attract a loading, as do pre-existing conditions, which insurers may simply exclude instead. Family history usually only bites where a specific inherited condition is involved.

The definition of incapacity in the wording decides how straightforward a claim will be. An own occupation policy pays if you cannot do your own job, and it is the version worth stretching for in a specialist role. A suited occupation policy pays if you cannot do any job of similar pay and status. An any occupation policy pays only when you cannot do any job at all, which makes it much the cheapest and much the hardest to claim on.

UK income protection payouts are tax-free if you pay the premiums yourself, which is why the sum you enter should be based on gross salary rather than take-home pay. Cover can be arranged to pay until retirement age, until a specific age, or for a fixed spell of typically 12-24 months on a budget plan. Long-term cover running to retirement costs 2-3 times as much as a short-term policy, and it is the one that matters for the self-employed and for anyone without a deep savings buffer.

About 1 in 4 workers spend a month or more off sick at some point in their working lives, on ABI figures, so this is not a remote risk. The same body reports that 92% of income protection claims are paid, which is high by insurance standards. Refusals cluster around non-disclosure of pre-existing conditions, outright fraud, and arguments over the incapacity definition. Full disclosure on the application costs nothing, and a review every 5 years keeps the cover in step with changes to your job, your health and your mortgage.