Income Insurance Advice

The purpose of income insurance is to protect a portion of your income in the event of accident, sickness or illness.

With income protection insurance, the only requirement in order to make a claim on your policy is a signed doctor’s note from your chosen local/general practice.

Income protection ensures that when a doctor confirms to the insurer that your accident, sickness and/or illness is severe enough to prevent you from working to full capacity, you can shortly earn income benefits.

However, at any time, the insurer can ask your doctor for further proof that you cannot work to full capacity.

You can only claim income benefit when you are unable to work at full capacity due to accident, sickness or illness.

ill man

Based on current income protection criteria, as of June 2019, your income benefit cannot exceed 60% of your gross annual income.

The primary reason for this is that insurers assume that you will receive some other form of income benefit during periods of accident, sickness or illness.

For example, if you are employed, you will be entitled to Statutory Sick Pay (SSP).

This can be paid for up to 28 weeks. Although, most companies offer SSP for a 13-week period.

However, SSP is not available for people who are self-employed.

Therefore, to ensure some form of income during times of accident, sickness or illness, self-employed people often place greater emphasis on arranging income protection insurance.

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Monthly Premiums

The cost of monthly premiums for income protection is determined by various factors. A few of these factors are:

  • Deferred Period
  • Sum Insured
  • Occupation
  • Low Cost vs Standard Insurance

Deferred Period

The deferred period refers to the length of time before any income benefit is received.

The deferred period options range from 4, 13, 26 or 52 weeks.

As most employees receive SSP for 13 weeks, a 13-week deferred period is the most common choice.

The longer the deferred period, the lower the monthly premiums.

Sum Insured:

Of course, the monthly income benefit required will significantly influence the monthly premiums.

Expect higher monthly premiums for a greater sum insured.


The occupation of the applicant will also have a substantial impact on the monthly.

Income insurers categories occupations into different classifications.

For most insurers, these classifications are:

  • Class 1: Managers; Office Staff, Staff with Minimal Business Mileage; Admin Clerks; Secretaries.
  • Class 2: Lowly Manual Workers; Shop Assistants; Workers with High Business Mileage; Engineers.
  • Class 3: Moderate Manual Workers; Plumbers; Teachers; Social Workers; Semi-Skilled Workers.
  • Class 4: Heavily Manual Workers; Bar Personnel; Constructions Workers; Mechanical Workers.

The higher the class, the higher the monthly premiums.

This is because higher classifications carry a greater risk of accident, sickness or illness.

For certain occupations, income insurance is unavailable.

These are occupations that carry a high risk of accident, sickness or illness.

For example, soldiers in the army would struggle to acquire income insurance.

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Low-Cost vs Standard Income Insurance:

There are two different types of income insurance Low Cost and Standard.

The key distinction between them is the duration of a claim.

With Low-Cost, income benefit can be claimed for up to 2 years.

This suits most of the working population because it is unlikely that an accident, sickness or illness will endure for over 2 years.

couple signing contract

Whereas, with Standard income insurance, benefit can be claimed often up to retirement age.

Therefore, this type of insurance may be more suitable for people in a Class 4 occupation where risk of long-term injury is high.

As you would expect, low-cost is cheaper than standard income insurance.

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For further information on income insurance, please click the ‘Contact Us‘ button and submit an insurance enquiry form.

Our advisers would be happy to arrange a free consultation to discuss your requirements in depth.