How much does Income Protection Insurance cost?

Income protection insurance can be useful to those who rely on their income to pay for their monthly expenses if an illness or injury left them unable to work. The cost of income protection is often the biggest question for people looking for cover.

The plan’s monthly payments, or premiums, can vary depending on personal circumstances. Certain factors of the policy may also change the price.

This guide shares the main influences on the cost of your plan, with tips to help you find an affordable way to protect your income.

What factors impact the cost of income protection insurance?

The cost of income protection can be shaped by personal factors, such as your age, health and occupation. How the policy is set up can also affect the cost of your monthly payments.

This section takes a closer look at some of the main factors, and why they can make a difference to the cost of income protection cover.

Age

Age is the most likely factor to influence the cost of your financial protection.

Premiums typically rise with age. Monthly premiums are usually lower when you are younger, as you’re statistically less likely to have a long-term illness or injury.

Health

Your health and lifestyle can be major considerations in the quote process. Non-smokers in good health usually see the most affordable monthly payments.

However, people with medical conditions or high-risk habits may come across restrictions or higher premiums.

Factor	Impact on premiums
Non-smoker, healthy	Lowest premiums
Smoker	Premiums may be higher due to health risks
Pre-existing health conditions	Premiums may rise or exclusions may apply
Weight or BMI outside of the ideal range	Higher premiums if linked to health risks
High-risk hobbies	Activities like climbing, motorsport, diving may increase costs or lead to exclusions

Occupation

Your job could impact how much you will need to pay, as many insurance providers categorise occupations according to risk.

Office-based roles are cheaper to cover, while manual or hazardous work can increase premiums as there is more chance of getting injured at work.

Insurers assess risk based on accident likelihood and physical demand, resulting in higher costs for hazardous roles.

Other considerations

It’s worth looking beyond personal risk factors, as the policy itself can make a big difference.

You might find certain features like a deferred period length, benefit amount, and policy type change the cost.

Feature	Effect on cost
Deferred period or waiting time	Short (e.g. 4 weeks) – higher cost, payout starts sooner. Long (6–12 months) – lower cost but you may need financial support during the waiting period.
Benefit payment term	Limited (e.g. 2–5 years) – cheaper. Until retirement = more expensive but provides fuller protection.
Definition of incapacity	“Own occupation” – higher cost but better cover if you can’t do your specific job. “Any occupation” – cheaper, but can be harder to claim, as you are only covered if you can’t do any job.
Cover linked to inflation	Higher premiums, but benefits rise with inflation to protect their real value.
Level of cover or percentage of income insured	More cover means higher cost. Typical maximum is 50–70% of gross income.

Whether income protection is worth it for you depends on your personal circumstances and what you need to cover. It’s worth doing your research to find the best income protection rates for your situation.

How much coverage do you need, and how does it affect the cost?

Your monthly premium is the amount you pay for your income protection insurance. This cost is directly linked to the amount of income you choose to cover, known as the ‘benefit amount’.

Some insurers will allow you to cover up to 70% of your pre-tax income. The higher the benefit you choose, the more your monthly premium will be.

When deciding how much cover you need, it’s helpful to consider your essential outgoings, such as mortgage or rent payments, bills, and food costs. You might not need to cover 100% of your income to maintain your lifestyle if you became ill or injured.

By only insuring what you need to cover essential expenses, you can keep your premiums down.

It’s also important to consider that your financial situation may change over time. You should regularly review your policy to make sure the level of cover still works for you.

Are there ways to get income protection with lower premiums?

Yes, there are several ways to get income protection coverage without overpaying.

Below are a few options to consider:

• Choose a longer deferred period. You can choose to wait longer for payments to start. For example, after your Statutory Sick Pay (SSP) ends. The longer you can wait, the lower your premiums are likely to be.
• Take out shorter-term cover. You can cover your salary for 1–2 years instead of until retirement. This can significantly reduce your monthly payments.
• Only insure some of your income to cover essential costs like mortgage repayments. This can be cheaper than insuring the full amount of your salary.
• Compare quotes and choose a provider with flexible options that work for you.
• Get advice from trusted sources. You could speak to a qualified financial adviser or Citizens Advice for impartial advice.

Key points to remember

• The cost of income protection insurance depends on several factors, including your age, health, and occupation.
• The policy’s features, like the deferred period and benefit amount, also influence the cost.
• Manage the cost by choosing a longer waiting time, a shorter benefit period, or by only covering your essential expenses.
• Income protection can be a valuable way to secure your finances if you are unable to work due to illness or injury.

In 2024, we paid 96% of all income protection claims, making sure members received the financial help they needed while they were unable to work. We also have an award-winning claims team and the ability to refer you to a range of rehabilitation services if you need them.

Sound good? You can find out more about our Income Protection Insurance and get a quote online.

Be sure to read through our important information and key features. Remember that when you invest, your capital is at risk.

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