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Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
14.05.2025
Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
14.05.2025
Income Protection
Protect your income and your future with Ascot Mortgages.
We offer personalised advice to help you find the right income protection insurance policy for you and your family. This provides financial security and real peace of mind, just in case you’re ever unable to work due to illness or injury.
Get in touch to arrange your free initial consultation with one of our experienced protection advisers.
What Is Income Protection Insurance?
Income protection cover can give you a monthly income if you’re unable to work for an extended period due to illness or injury.
If you’re unlucky enough to sustain an injury or fall seriously ill, you may not be able to work. But unfortunately, those mortgage payments need to be paid and household bills will keep coming in. You might find that the sudden loss of income can be really tough to handle.
That’s where income protection comes to the rescue. It provides you with a regular income if you can’t work due to illness or injury. This can be a vital safety net for you and your family, during what is likely to be a challenging time. You don’t have to worry about money and bills – all you need to focus on is getting better.
Is This The Best Kind Of Cover For Me?
There are a few different kinds of income and mortgage protection insurance cover, each designed to provide a financial safety net for a range of circumstances – including loss of earnings due to illness or injury.
Income protection may be ideal for your needs, but it’s also possible that another product – such as critical illness cover, for example – could be a better fit. To find the best solution for you and your family, get in touch with Ascot Mortgages to arrange a free consultation.
We’ll ask you about your circumstances and what you’d like to achieve, and walk you through the different options – including mortgage payment protection insurance, life insurance and critical illness insurance.
Our experienced advisers will explain everything in a clear, unbiased and helpful way. It’s all to help you make the right decision for you.
Are There Any Exclusions With Income Insurance Policies?
Before you take out any kind of insurance policy, it’s important to find out exactly what is and isn’t covered.
Income protection, also known as loss of earnings insurance or permanent health insurance, is designed to cover only certain types of illness and injury. Examples of what is usually covered include musculoskeletal problems, mental health problems like depression, stress and anxiety, and serious illnesses and medical issues.
It generally doesn’t cover the following:
- Unemployment due to redundancy
- Pre-existing medical conditions (unless disclosed and agreed upon)
- Self-inflicted injuries.
Do I Really Need Income Protection Insurance?
Income insurance isn’t suitable for everyone. It’s worth considering whether you could manage with other support if you became ill and weren’t able to work.
You may not need income protection if any of the following apply:
- You have enough savings to live on for a long period
- Your partner or family could support you
- You are eligible for government benefits – and these would be enough to cover your essential expenses until you’re able to work
- Your employer’s sick pay policy will last long enough to cover you.
It’s important to bear in mind though that recovery from illness or injury can sometimes take longer and be more complicated than you think. It may be some time until you’re well enough to work, and then there may be further delays while you find a job (unless your old job is still available).
All of the above means of support may last for a while, but not forever. You may need an additional safety net in place.
What Are The Pros And Cons Of Income Protection Cover?
Income protection offers many advantages, but there are also some potential drawbacks to consider.
Pros:
- Regular income support
- Peace of mind, so you can focus on your health without worrying about money
- Works with other benefits such as statutory or employer sick pay (although it may affect your entitlement for government benefits)
- Flexible policies available, with different levels of cover and customisable add-ons to suit your needs
- All payments are free of income tax
- Can be used by self-employed people too.
Cons:
- You will only receive 50-70% of your usual income
- You’ll need to wait a few weeks until you can start receiving your benefit – this is known as a ‘deferred period’
- Not all illnesses and injuries are covered.
What Level Of Cover Do I Need?
The level of income protection cover you’ll need will depend on your usual income and monthly outgoings. But many insurers also offer differing levels of cover based on your situation:
- Own occupation – your illness or injury has meant you can’t do your own job
- Suited occupation – you can’t do your own job or a similar one in line with your experience and qualifications
- Any occupation – you’re unable to do any kind of work.
To find the right level of cover for you, get in touch with Ascot Mortgages to arrange a free one-to-one consultation.
How Much Does Income Protection Cost In The UK?
The cost of income protection cover varies based on factors such as your age, health, occupation and the level of cover you need. It’s advisable to obtain multiple quotes to get an accurate price range, and this is something that your Ascot Mortgages adviser can handle on your behalf.
As for what affects the cost of income protection insurance, there are some other factors to consider. You may pay more if you:
- Smoke or have smoked
- Have what insurers perceive to be a ‘risky’ job or hobbies
- How much of your income you need the policy to cover
- Need a shorter waiting/deferred period until the policy pays out
- Pay a standard premium (which may increase) or a guaranteed premium (which stays fixed for the length of the policy).
What Do I Need To Tell My Insurer Before Taking Out An Income Protection Policy?
It’s crucial to be completely honest when applying for income protection insurance, especially when it comes to your medical history.
You’ll need to tell the insurer about any pre-existing conditions, family history of medical issues, full details of your job and lifestyle, and anything else you’re asked.
If you don’t disclose everything upfront, there’s a risk the insurer may not pay out on the policy when you really need the money.
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Your Income Insurance Questions Answered
Yes, income protection can be a valuable safety net. It provides financial support if you cannot work due to illness or injury, ensuring that you can maintain your standard of living and cover essential expenses.
The waiting or deferred payment before a policy pays out is usually a few weeks. In some cases, you’ll be able to choose a longer or shorter waiting period – but bear in mind that your premiums may be higher for shorter periods.
The term depends on your individual needs. Some opt for short-term policies, covering a few years, while others choose policies that last until retirement age.
If you’ve changed your mind about income protection cover, you’ll usually have around 30 days to cancel your policy for a full refund. After this period, you can cancel your policy but you may not receive a refund.
Income protection insurance is usually a single person policy, although you can talk to your insurer or broker about taking out cover for the whole family.
While it depends on the insurer, income protection policies usually pay out 50% to 70% of your usual income.
Income protection payouts are typically tax-free. However, if you pay the premiums from pre-tax income or through your company, then payouts may be taxable.
It covers situations like serious illness, injuries, or disabilities that prevent you from working.
The duration varies. Some policies might pay out for a set number of years, while others continue until retirement age or until you’re able to return to work.
Yes, policies often have exclusions, such as certain illnesses or pre-existing conditions. It’s essential to read the policy’s terms and conditions to understand these exclusions.
Absolutely, self-employed individuals can benefit significantly from income protection, given they might not have other forms of sick pay.
Short-term policies typically provide cover for one or two years per claim, while long-term policies can provide cover up until retirement age if you’re unable to return to work.
Potential disadvantages include the cost of premiums, waiting periods before claims can be made, and potential exclusions in the policy.
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