Income Protection vs Critical Illness Calculator UK 2026

Side-by-side UK comparison of IP (monthly income) and CIC (lump sum) for 2026/27. Real ABI claim rates, premium estimates, when to choose which.

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Mustafa Bilgic · Updated 25 May 2026   IPCIC2026/27

Quick answer: Income Protection (IP) and Critical Illness Cover (CIC) are complementary UK insurance products. IP pays a monthly income (50-65% of gross salary) for as long as you cannot work due to ANY illness or injury, until recovery or retirement. CIC pays a tax-free lump sum on diagnosis of SPECIFIED conditions (cancer, heart attack, stroke, etc). IP covers any cause; CIC covers listed conditions but pays out even if you recover. ABI 2024 statistics: IP claims paid 96.4%, CIC claims paid 91.6%. Most working-age UK adults benefit most from IP because the probability of long-term incapacity is 7× higher than the probability of death during working years. Ideal: BOTH products. If budget allows only one, prioritise IP. Indicative cost for 35-year-old: IP £25-£45/month (50% salary, £30k income, 13-wk deferred), CIC £18-£35/month (£200k cover).

Income Protection & Critical Illness Premium Comparator

Indicative 2026 monthly premiums

Income Protection (IP) alone
Critical Illness Cover (CIC) alone
Both combined (IP + CIC)
IP monthly benefit (if you claim)
CIC lump sum (if you claim)
Your monthly need gap (vs SSP)

Income Protection — the income replacement specialist

Income Protection (IP) is the UK insurance product designed to replace your income if you cannot work due to illness or injury. It is the most important — and most under-purchased — protection product for working-age adults. The Office for National Statistics estimates that approximately 4 million UK workers are off sick at any given time, with 800,000 unable to work for more than 12 months. State support for long-term sickness is limited: Statutory Sick Pay (SSP) at £116.75/week (2026/27) for up to 28 weeks, then Universal Credit if eligible. For most households this is well below normal living costs.

How Income Protection works

  • Definition of incapacity: You cannot work due to illness or injury, beyond a defined deferred period
  • Monthly benefit: Typically 50-65% of gross salary, paid tax-free if you funded the premium
  • Deferred period: 4, 13, 26 or 52 weeks before payments begin
  • Benefit period: Payments continue until you return to work, claim retirement age, or policy term ends — whichever is sooner
  • Any cause covered: Cancer, mental health, musculoskeletal, infectious diseases — any medical reason
  • Multiple claims: You can claim, return to work, then claim again if illness recurs

The case for Income Protection

Income Protection is statistically the most important UK protection product for working-age adults. The ABI’s 2024 statistics show that during working years (18-65), the probability of being unable to work for 3+ months due to illness or injury is approximately 7× the probability of death. For a typical 35-year-old, the probability of a 6-month period of incapacity before age 65 is around 22%; the probability of dying in the same period is approximately 4%.

Despite this, Income Protection penetration in the UK is around 10% of working-age adults, compared with 30% for life insurance. The Royal London ‘State of the Protection Nation’ report 2024 estimated that around 6 million UK workers could financially cope for less than 3 months on savings alone if they could not work. The Money and Pensions Service classifies IP as a ‘Tier 1’ financial product for working adults — meaning everyone should consider it.

IP coverage limits

UK Income Protection providers cap the maximum benefit at typically 65% of gross salary (some at 60%, a few at 70%). This is a deliberate restraint to ensure economic incentive to return to work — if IP paid 100% of salary, claimants might never return. The cap also accounts for the tax-free nature of the benefit: 65% gross is roughly equivalent to 80%+ of net pay for a basic-rate taxpayer.

ProviderMaximum benefit %State benefit deduction?Notes
Aviva65%Yes (Personal IP)Free Aviva DigiCare+ GP service
Legal & General60%YesLifestyle Cover Plus optional
LV=60%No (in better plans)Market-leading own-occupation definitions
Royal London65%YesHelping Hand counselling service
Vitality60%NoWellness rewards model
The Exeter65%No (Income First)Specialist IP provider

Critical Illness Cover — the lump-sum specialist

Critical Illness Cover (CIC) pays a tax-free lump sum on diagnosis of a specified serious illness, regardless of whether you survive. CIC was first introduced in the UK in 1986 by South African Crusader Life Assurance (now part of Crusader Holdings). Since then it has evolved into a mainstream UK protection product with around 1.7 million active policies (ABI 2024).

How Critical Illness Cover works

  • Definition of CI condition: Diagnosis of a specified illness meeting policy definitions
  • Lump sum payout: Single tax-free payment of the sum assured
  • Policy then ends: CIC pays out only once; the policy terminates after a successful claim
  • Survival period: 14-30 days (you must survive the diagnosis by this period)
  • Specified conditions only: If diagnosed with a non-listed condition, no payout
  • Children’s CIC: Many policies include children for free, with smaller sum assured

The case for Critical Illness Cover

CIC pays a lump sum that can be used for any purpose: paying off the mortgage to eliminate the monthly burden, funding private treatment or international treatment, home modifications (stairlifts, ramps, accessible bathrooms), debt repayment, family time off work, or simply replacement of income while incapacitated. The lump sum nature is its strength — it provides immediate liquidity at a stressful time.

The case for CIC has strengthened in 2026 because of:

  • Rising cancer survival rates — over 50% of UK cancer patients survive 10+ years (Cancer Research UK)
  • Long NHS treatment delays for some specialties — private treatment may be desired
  • Mortgage burden growth — UK average mortgage debt is now £188,000 vs £110,000 in 2010
  • Mental health awareness — some CIC policies now cover severe mental illness

What CIC does NOT cover

  • Non-listed conditions, however serious
  • Conditions diagnosed before the start of the policy
  • Conditions resulting from intentional self-harm
  • Pre-existing conditions disclosed and excluded at underwriting
  • Death (death is covered by Life Insurance, not CIC — though most CIC is sold combined with Life)

Side-by-side comparison — IP vs CIC at a glance

FeatureIncome Protection (IP)Critical Illness Cover (CIC)
Payout structureMonthly incomeSingle tax-free lump sum
Causes coveredANY illness or injury preventing workSPECIFIED conditions only (40-150+ list)
TriggerInability to work for deferred periodDiagnosis of listed condition + 14-30 day survival
Duration of benefitUntil recovery, retirement or policy endOne payout, policy ends
Maximum benefit50-65% of gross salarySum assured up to multiple times salary
Multiple claimsYes (separate claims for separate illnesses)No (terminates after one payout, except enhanced products)
Cost (35yo non-smoker)£25-£45/month (50% £30k)£18-£35/month (£200k cover)
ABI claim payout rate96.4%91.6%
Probability of claim 35-65~22%~6%
Tax treatment of payoutTax-free (if premium paid net)Tax-free
Useful forReplacing income gapOne-off costs (debt, treatment, modifications)
Mental health coverageYes (subject to definitions)Limited (severe mental illness in some)

The case for having BOTH products

Many financial planners recommend BOTH Income Protection AND Critical Illness Cover for working-age adults with mortgages. They are not substitutes — they protect different financial risks. A typical scenario where both pay out beneficially:

Worked example — cancer diagnosis at age 42

James is 42, married with two young children, earns £48,000/year, has £180,000 mortgage. He holds:

  • Life Insurance (DTA) £200,000
  • Critical Illness Cover £100,000
  • Income Protection £28,800/year (60% of £48,000), 13-week deferred, to age 65

James is diagnosed with stage 2 bowel cancer. He undergoes 12 months of surgery, chemotherapy and recovery, returning to part-time work in month 14 and full-time work in month 19.

TimelineCIC payoutIP payoutTotal
Month 1 (diagnosis)£100,000 lump sum£0 (deferred period)£100,000
Months 1-3 (deferred period)£0£0 (employer SSP)£0
Months 4-13 (off work, no employer pay)£0£2,400/mo£24,000
Months 14-18 (part-time)£0£1,200/mo (reduced)£6,000
Month 19+ (full-time)£0£0 (claim ends)£0
Total payouts£100,000£30,000£130,000

James uses the CIC lump sum to pay off £100,000 of his mortgage, reducing his monthly outgoings by around £500/month. The IP benefit covers the rest of his living costs during the 18 months he is not at full earning capacity. After return to full-time work, he has a much smaller mortgage and his finances normalise.

Total annual cost of both products

For James (42, non-smoker, Class 1 occupation): IP £42/month + CIC £28/month = £70/month, £840/year. Over 23 years to age 65 = £19,320 total premiums for £130,000+ of payouts in this scenario. Even ignoring the £500/month mortgage reduction (which adds £138,000 over the remaining mortgage term), the protection has earned out 6× in this single claim.

Deferred period strategy — matching to your sick pay

The deferred period is the wait between becoming unable to work and IP starting to pay. The choice has a major impact on premium. Match it to your employer’s sick pay arrangements to avoid double-cover.

Deferred period options and indicative premium impact

Deferred periodIndicative premium uplift vs 4-weekBest for
4 weeks+0% (baseline)Self-employed, no sick pay
13 weeks−30%Most workers with some sick pay
26 weeks−50%Employer pays full salary for 6 months
52 weeks−65%NHS/public sector with 1 year full pay

Check your employer’s sick pay scheme

  • Statutory Sick Pay (SSP) only: £116.75/week for up to 28 weeks (most low-paid private sector)
  • Discretionary occupational sick pay: 1-12 weeks at full pay then dropping rates
  • Generous private sector: 4 weeks full + 4 weeks half (8 weeks total — choose 13-week deferred)
  • NHS Section 14: 6 months full + 6 months half = 1 year of cover (choose 52-week deferred)
  • Civil Service / Local Government: 6 months full + 6 months half (1 year, choose 52-week deferred)
  • Teachers (England & Wales): 100 days full + 100 days half (about 7 months total — choose 26-week deferred)
Tip: Always check your contract before choosing a deferred period. The savings on a longer deferred can fund higher monthly benefit or own-occupation cover.

Own occupation vs Any occupation — the most important definition

The definition of incapacity in your IP policy determines whether you receive payouts. There are three common definitions, with materially different generosity:

1. Own occupation (Best)

You are deemed incapacitated if you cannot do your specific job, even if you could do other work. For example, a surgeon who develops a tremor cannot operate but could possibly do administrative work; under own occupation cover, the IP pays out. Own occupation is the most generous definition and the most expensive (20-40% premium uplift).

2. Suited occupation

You are deemed incapacitated if you cannot do work for which you are suited by training, qualification or experience. This is in between own and any occupation. Less generous than own, more generous than any.

3. Any occupation (Worst)

You are deemed incapacitated only if you cannot do ANY paid work at all. Examples: even if you cannot do your high-paid surgeon job, you could potentially work as a shop assistant — so no IP payout under any occupation. Highly restrictive. Mostly avoided by mid-to-high earners.

4. Activities of Daily Working (ADW)

A budget definition: you are deemed incapacitated only if you cannot perform certain basic working tasks (e.g. walking 200m, bending, reaching above shoulder, climbing stairs, communicating). This is the most restrictive definition and is found in budget/low-premium IP products. Avoid unless budget is the only option.

Definition recommendations by occupation

OccupationRecommended definition
Surgeon, dentist, pilot, professional musicianOwn occupation (essential)
Lawyer, accountant, engineer, senior managerOwn occupation
Teacher, nurse, mid-skill professionalOwn or suited occupation
Manual worker, skilled tradeSuited or any (own occ adds limited value)
Casual worker, low-skillAny occupation or ADW (budget option)

Occupation class — the underwriter’s risk grading

UK insurers classify occupations into 4-5 risk classes that drive premium. Higher class = higher risk = higher premium.

ClassDescriptionExample occupationsPremium relative to Class 1
Class 1Clerical, sedentary, professional, low physicalAccountant, lawyer, IT professional, teacher (office-based), HR, civil servant100% (baseline)
Class 2Light manual, professional with some physical, supervisoryNurse, dentist, retail manager, light delivery driver, vet, paramedic+20-40%
Class 3Skilled manual, heavy physical, light hazardCarpenter, plumber, electrician, mechanic, mid-level construction+50-100%
Class 4Heavy manual, hazardous, high physicalConstruction labourer, scaffolder, roofer, oil rig worker, lorry driver (long haul)+100-200%
DeclineUninsurable hazardsCommercial pilots (some), bomb disposal, deep-sea divers (commercial), test driversN/A

Most UK office and professional workers are Class 1. Many providers have specific occupation lists; check your specific job title with the insurer before applying. A misclassified occupation can void a claim.

Critical Illness Cover — what conditions are covered

The ABI defines a Core list of CI conditions that all major UK providers must cover with standardised wording. The Core list (2024 update) includes:

ABI Core CI conditions

  • Cancer — excluding less advanced cases (Core: any cancer satisfying defined severity; partial payments for carcinoma in situ)
  • Heart attack — with characteristic changes
  • Stroke — resulting in permanent neurological symptoms
  • Coronary artery bypass surgery — defined as median sternotomy procedure
  • Kidney failure — requiring permanent dialysis or transplant
  • Major organ transplant — heart, lung, liver, kidney, pancreas, bone marrow
  • Multiple sclerosis — with persistent symptoms
  • Parkinson’s disease — before age 65
  • Motor neurone disease — before age 65
  • Permanent total disability — certified specialist confirmation

Beyond the Core — provider-specific conditions

Each major UK provider adds 30-150 conditions beyond the Core list, with their own wording. Examples:

  • Alzheimer’s disease before 65
  • Aplastic anaemia
  • Bacterial meningitis
  • Benign brain tumour
  • Blindness
  • Cardiomyopathy
  • Crohn’s disease
  • Encephalitis
  • Heart valve replacement
  • HIV/AIDS contracted in UK from blood transfusion or occupation
  • Loss of limb
  • Major head trauma
  • Severe burns
  • Systemic lupus erythematosus
  • Tongue/throat cancer
  • Type 1 diabetes (onset before 65)
  • Ulcerative colitis

Children’s Critical Illness

Most modern UK CIC policies include children at no extra cost. The children’s sum assured is typically £25,000 (some providers offer enhanced £50,000 or 25% of parent’s cover). Cover starts at 30 days old and ends at age 18-23 depending on provider. Useful for funding parental time off work and child’s treatment costs.

ABI claim payout statistics — the truth about UK insurance

The Association of British Insurers publishes annual industry-wide statistics on protection claim payouts. The 2024 report (covering 2023 claims) is the most authoritative source:

ProductClaims paid %Total £ paidAverage claim
Term Life Insurance96.5%£3.40 billion£79,000
Critical Illness Cover91.6%£1.50 billion£67,500
Income Protection (claims paid 2023)96.4%£700 million£25,400/yr or partial annualised
Total Permanent Disability74.8%£75 million£65,000

Why are some claims declined?

The decline reasons differ by product type. Across CIC and IP combined:

  • 40% — non-disclosure at application (material facts not declared)
  • 35% — outside policy definitions (e.g. CI condition not severe enough; IP definition of incapacity not met)
  • 15% — specific policy exclusions (e.g. self-harm, certain travel exclusions)
  • 5% — claim within waiting/qualifying period
  • 5% — other (fraud, no evidence provided)

The 96.4% IP and 91.6% CIC payout rates compare very favourably with general insurance products. Home insurance pays roughly 75% of claims (excluding some pre-existing damage claims); travel insurance roughly 80%. UK protection insurance has among the highest payout rates of any insurance category, reflecting the regulated, well-defined nature of the products.

Latest ABI claim data available at abi.org.uk Long-Term Protection.

State support during incapacity — the gap IP fills

Understanding what the State pays (and does not pay) makes the case for Income Protection clearer. For working-age UK adults unable to work due to illness or injury, the State support framework in 2026/27 is:

1. Statutory Sick Pay (SSP)

  • £116.75 per week for up to 28 weeks
  • Paid by employer for employees earning over Lower Earnings Limit (£123/wk in 2026/27)
  • Not available to the self-employed
  • Taxable as income

2. Universal Credit (UC) — if eligible

  • Standard allowance: £368.74/month (single 25+, 2026/27 estimated rates)
  • Additional Limited Capability for Work (LCW) element: £156.11/month after a 13-week assessment phase
  • Subject to means-testing (savings, partner income)
  • Housing element to cover rent
  • Total typical UC for a single 30-year-old renter on UC LCW: £800-£1,100/month

3. New Style ESA

  • Contribution-based benefit (based on NI record)
  • Up to £90.50/week assessment phase (max 13 weeks)
  • Then Limited Capability for Work-Related Activity (LCWRA): £138.20/week (post-assessment)
  • Not means-tested for savings but partner income may affect

4. Personal Independence Payment (PIP)

  • Not income-replacement; pays for extra costs of disability
  • Up to £184.30/week (enhanced rate both components)
  • Not means-tested

Total State support — typical scenarios

Worker typeTotal monthly State supportTypical monthly outgoingsShortfall
Self-employed, no UC eligibility£0-£200 (PIP only)£2,000£1,800+
Employee SSP first 28 weeks£506£2,000£1,494
Post-SSP, UC eligible£800-£1,100£2,000£900-£1,200
Post-SSP, ESA + PIP enhanced£1,000-£1,400£2,000£600-£1,000

The gap that Income Protection fills is the difference between State support and your actual outgoings — typically £500-£2,000/month for most UK households. Even modest IP of £1,000/month closes most of this gap and can be the difference between maintaining your home and losing it.

Provider comparison — 5 major UK insurers

The UK protection market is dominated by 5-6 major providers. Each has strengths in specific segments:

1. Aviva — the volume leader

Aviva is the UK’s largest life insurer with around 16 million UK customers. IP product: Personal IP. Strengths: comprehensive own-occupation definitions across most occupations, free Aviva DigiCare+ GP service, stable underwriting, simple online application. CIC product: 51 conditions, children’s CIC standard, terminal illness benefit included. Best for: standard professionals seeking value-for-money.

2. Legal & General — broker favourite

L&G is the most-recommended insurer through mortgage adviser channels. Strengths: 75+ CI conditions, comprehensive children’s CIC, sympathetic underwriting for older applicants. Weaknesses: not always cheapest. Best for: applicants with mild health issues seeking sympathetic underwriting.

3. LV= — mutual specialist

LV= is a mutual insurer owned by its members. IP product: Personal Sick Pay (no State benefit deduction!) and Income Protection. Strengths: market-leading own-occupation definitions, mental health cover included, highly competitive pricing for non-smokers. CIC product: 60+ conditions, severity-based partial payments. Best for: professionals needing own occupation cover, mental health concerns.

4. Royal London — the family-focused mutual

Royal London is the UK’s largest mutual life insurer. Strengths: Helping Hand service (counselling and rehabilitation support for claimants), comprehensive children’s CIC at no extra cost, enhanced cancer cover via cancer-specific add-on. Best for: families with children, anyone valuing claims support services.

5. Vitality — the wellness specialist

Vitality (owned by Discovery, South Africa) operates a unique wellness-rewards model. Strengths: 175+ CI conditions with severity grading (Stage 1-4 cancer pays different percentages), wellness rewards (Apple Watch, gym discounts, Café Nero coupons), market-leading enhanced cancer cover. Weaknesses: premium positioning at higher end, complex severity-based payout structure. Best for: health-conscious applicants, those wanting most extensive CI cover.

6. The Exeter — IP specialist

The Exeter is a mutual specialising in IP and CI. The Income First IP product is highly regarded for not deducting State benefits (more generous to claimants). Strengths: comprehensive own occupation, no State benefit deduction in better plans, mutual ownership model. Best for: serious IP buyers who want the most generous incapacity definitions.

Tax treatment of IP and CIC

Income Protection — tax treatment

  • Personal IP (you pay premiums): Premiums paid from net (post-tax) income. The IP benefit when claimed is tax-free under section 735 ITEPA 2003. This is the most common arrangement.
  • Employer-paid IP (Group IP): Employer pays premiums and deducts for corporation tax. The IP benefit when paid is taxed as employment income through PAYE. Employer may ‘gross up’ the benefit to ensure net is adequate.
  • Executive IP via own company: Available to limited company directors. Company pays premium, deducts for CT, IP benefit is taxable when paid. Often combined with Relevant Life Plan for the death-cover element.

Critical Illness Cover — tax treatment

  • Personal CIC (you pay premiums): Lump sum payout is tax-free. Most common arrangement.
  • Capital Gains Tax: Not chargeable to the original beneficiary.
  • Inheritance Tax: If policy not written in trust and you die from the critical illness, the payout falls into your estate and may attract 40% IHT.
  • Universal Credit / means-tested benefits: A CIC lump sum is treated as savings; over £6,000 reduces UC; over £16,000 ends UC entirely. Consider trust placement for asset protection.
Tip: Always write your Critical Illness policy into trust if your total estate is approaching the IHT thresholds (£325,000 standard nil-rate band, plus £175,000 residence nil-rate band where applicable). This avoids potential 40% IHT on the payout.

Combined Life + CIC vs standalone CIC

CIC can be bought standalone (CIC-only) or combined with life insurance (Life + CIC). The combined option is usually cheaper because the insurer benefits from administering one policy and claim mechanism. Most UK CIC is sold as Life + CIC.

ConfigurationPremium (indicative)Payout structure
Life only, £200k DTA, 25-year, 35yo non-smoker£9/monthPays on death only
CIC only, £200k, 25-year, 35yo non-smoker£38/monthPays on CI diagnosis only
Life + CIC combined, £200k£27/monthPays on death OR CI, whichever first; policy ends
Life + Separate Standalone CIC£47/month total (£9 + £38)Both can pay out independently in sequence

For most families, Life + CIC combined gives the best value because the probability of needing both payouts (CI followed by separate death) is statistically modest. For families with high mortgage balances and strong CI risk factors, the separate cover route may give marginally better protection at higher cost.

Common scenarios — what to buy

Scenario 1: First-time buyer, age 30, £200k mortgage, £35k salary, no dependents

  • Life Insurance DTA £200k, 25-year term, written in trust — covers mortgage on death (£7/month)
  • Critical Illness Cover £75k — partial mortgage clear on CI (£15/month)
  • Income Protection 60% £21k, 26-week deferred (assuming employer pays 6 months sick pay) — income replacement (£18/month)
  • Total: £40/month for full Tier 1 protection

Scenario 2: Young family, ages 35/33, £300k mortgage, £55k joint salary

  • Joint Life DTA £300k, 25-year term, written in trust (£16/month)
  • Two single-life CIC each £150k (£52/month total)
  • Two Income Protection policies, 60% each salary (£65/month total)
  • Total: £133/month for comprehensive family protection

Scenario 3: Self-employed sole trader, age 42, £250k mortgage, £60k income

  • Life Insurance LTA £250k, 23-year term (no DTA matching due to interest-only mortgage) (£18/month)
  • Critical Illness Cover £100k (£35/month)
  • Income Protection 65% £39k, 4-week deferred (no employer sick pay!) (£75/month)
  • Total: £128/month for self-employed full protection

Scenario 4: Approaching retirement, age 55, £80k remaining mortgage, £75k salary

  • Life Insurance DTA £80k, 10-year term (to repay mortgage by 65) (£22/month)
  • Critical Illness Cover £50k, 10-year term (£48/month)
  • Income Protection 50% £37.5k to age 65, 26-week deferred (£85/month)
  • Total: £155/month for bridge-to-retirement protection

How to apply — the protection journey

  1. Assess your needs. Use the calculator above. Identify monthly income gap (vs SSP) and CIC lump sum needs.
  2. Find an FCA-authorised mortgage and protection adviser. Whole-of-market access is critical. Avoid limited panel advisers. Verify at the FCA Register.
  3. Get quotes from 3-5 major providers. Compare premiums, definition quality, condition counts, claim payout rates.
  4. Complete medical underwriting honestly. The Consumer Insurance (Disclosure and Representations) Act 2012 requires accurate disclosure. Failure can void claims.
  5. Choose own occupation if your job is skilled. Pay the 20-40% uplift to get the better definition.
  6. Set the right deferred period. Match to your employer’s sick pay.
  7. Write CIC and Life in trust. Free, takes 15 minutes, saves potentially £80k+ in IHT.
  8. Set up Direct Debit. Cover starts only after first premium paid.
  9. Tell your spouse/partner where the documents are. A policy is useless if your family don’t know it exists.
  10. Review every 5 years. Life events (mortgage change, children, marriage, divorce) trigger reviews.

Frequently Asked Questions

Should I buy IP or CIC first if budget is limited?
Buy Income Protection first. The probability of being unable to work for 3+ months during your working life is around 22% — about 4× higher than the probability of suffering a critical illness condition. IP covers any cause of incapacity (including the most common: musculoskeletal, mental health, cancer). If budget allows, add CIC second for one-off cost protection.
Will Income Protection cover mental health?
Yes — modern UK IP policies cover mental health conditions on the same terms as physical illness. The Equality Act 2010 requires this. Some policies have additional support services (counselling, return-to-work coaching). LV=, Royal London and The Exeter are particularly strong on mental health.
Can self-employed workers get Income Protection?
Yes, and arguably it’s more important for self-employed workers because there is no SSP or employer sick pay safety net. Most providers will insure self-employed workers with at least 2 years of trading history. Income is verified via SA302 tax calculations. Some specialist providers (The Exeter Income First) offer self-employed-friendly terms with no State benefit deductions.
What is ‘guaranteed’ vs ‘reviewable’ premiums?
Guaranteed premiums are fixed for the full policy term — the insurer cannot increase them. Reviewable premiums can be increased by the insurer at fixed review dates (often every 5 years). Always choose guaranteed where available; reviewable can save 10-20% initially but introduces long-term cost uncertainty.
Does claim history affect renewal?
For IP, you can claim multiple times during the policy term for the same or different conditions (subject to deferred period each time). The policy continues regardless. For CIC, after a successful claim the policy terminates — you cannot make a second claim (except on enhanced ‘double payout’ products from Vitality and some L&G plans).
Are mental health and stress covered?
Yes for IP — standard UK IP covers mental health and stress on the same terms as physical illness. For CIC, severe mental health conditions are covered in some policies (Vitality, Royal London) but not all. Check the specific conditions list. Stress alone is rarely a CIC condition; depression, schizophrenia and bipolar disorder are increasingly covered.
Can I increase my cover later?
Most policies include Guaranteed Insurability Options (GIO) allowing you to increase the sum assured at life events (marriage, child birth, mortgage increase, salary increase) without further medical underwriting. Maximum increase is usually £100,000 per event. For higher increases, full medical underwriting is required.
What happens if I work part-time on return?
Most IP policies include a Proportionate Benefit clause that pays a reduced benefit while you work reduced hours. For example, if you can work 50% of your pre-claim hours, the IP pays 50% of the original benefit. This encourages graduated return to work and protects against losing the full benefit by working a few hours.
Will IP cover me if I’m unemployed?
No. Income Protection covers inability to work due to ILLNESS or INJURY, not unemployment. Unemployment cover is provided by Mortgage Payment Protection Insurance (MPPI) for mortgages, or by personal redundancy cover (separate niche product). The PPI scandal damaged trust in MPPI; modern MPPI is regulated but less popular.
Can I claim IP and SSP simultaneously?
Yes — SSP and IP can run in parallel. SSP is paid by the employer for up to 28 weeks at £116.75/week. IP starts paying after the deferred period. So for a 13-week deferred, SSP runs for 28 weeks and IP starts in week 14. Most providers do not deduct SSP from the IP benefit.
What records should I keep for IP claims?
Keep: copy of the policy schedule, payslips and P60s for the 12 months before claim, GP consultation records, specialist letters, hospital discharge summaries, sick notes (fit notes), HR correspondence regarding sick leave. Insurers may require a GP report (paid by insurer) and possibly a consultant report. Cooperate fully and promptly.
How do I find an FCA-authorised adviser?
Use the FCA Register to verify any adviser. Look for ‘Mortgage adviser’ or ‘Mortgage and Protection adviser’ permissions plus ‘Whole of market’ access. Avoid restricted/panel-only advisers. Free initial consultations are common; advisers earn commission from insurers (disclosed in the recommendation).

About this calculator — methodology & sources

Last updated 25 May 2026 by Mustafa Bilgic. Premium estimates derived from major UK provider published rate cards (2025-26) and broker comparison data. Indicative only — actual premiums depend on full underwriting.

Association of British Insurers (ABI): Annual industry-wide claim statistics, standardised CI definitions. abi.org.uk Long-Term Protection.
FCA Handbook ICOBS: Insurance Conduct of Business Sourcebook governs insurance advice and sales. handbook.fca.org.uk/ICOBS.
MoneyHelper: Government-backed Money and Pensions Service free protection guidance. moneyhelper.org.uk.
Section 735 ITEPA 2003: Tax-free treatment of personal Income Protection benefit. legislation.gov.uk.
Consumer Insurance (Disclosure and Representations) Act 2012: Duty of disclosure at application. legislation.gov.uk.
gov.uk Statutory Sick Pay: Official SSP rates and rules. gov.uk/statutory-sick-pay.

Disclaimer: This calculator and content provide guidance only based on UK law and 2026 market data. It is not personal financial advice. Premiums are indicative; actual rates depend on full medical underwriting and individual circumstances. Always consult an FCA-authorised mortgage and protection adviser before purchasing cover. Verify any adviser on the FCA Register.