The Best Income Protection Insurance 2022

Digby Bodenham
26 October 2021 - 13 min read

The Best Income Protection Insurance for 2022

We’ve ranked and reviewed the best income protection insurance policies in the UK for 2022 to help find you the right deal.

Best UK income protection insurance policies 2022

  1. AIG - Income Protection
  2. Aviva - Income Protection Insurance
  3. Legal & General - Income Protection Benefit
  4. LV= - Income Protection Insurance
  5. Nationwide - Income Protection Benefit
  6. Royal London - Income Protection Insurance
  7. The Exeter - Income First
  8. VitalityLife - Income Protection Cover
  9. Wesleyan - Income Protection Insurance
  10. British Friendly Society - Protect Insurance

How we created our list of the best income protection insurance policies

While it can sometimes be a challenge to find the best income protection insurance to suit your needs, it doesn’t have to be hard. 

To create our list, we outlined a set of requirements that we felt all our insurers had to hit for their policies. We’ve only included insurers that:

  • Included “Back to Work” benefits as standard on their policies.
  • A monthly sum starting from a minimum of £500.
  • Death benefits for your family should you pass away - either an amount equal to 12 times the monthly premium or a one off payment of £5,000 or £10,000.

What is income protection insurance?

Income protection is an insurance policy that is designed to pay out monthly if you’re unable to work due to illness, injury or disability. It’s a long-term insurance policy that will help with living costs while you’re not working and will continue to pay out until you return to work, retire or pass away.  

You won’t be able to claim income protection payments straight away if you fall ill or become disabled. Usually, you’ll have to wait for a minimum of up to four weeks for your payments to commence but sometimes you may only receive your payments up to two years after you stop working. This is because you may receive sick pay from your employer or you can claim statutory sick pay for up to 28 weeks after you stop working. 

Income protection insurance is different to that of critical illness cover or life insurance as they offer a one-off lump sum payment as opposed to paying out monthly. 

How does income protection insurance work?

Usually, income protection insurance is a straightforward process. To help you understand how it works, some of its key factors include:

  • A typical payout of between 50% and 70% of your income if you’re unable to work.
  • Cover for most illnesses if you’re unable to work, which are suitable with both short and long term policies. 
  • No limit on the number of times that you can claim while the policy lasts.
  • Provides regular payments that will replace part of your income if you become sick or have an accident. 
  • Pre-arranged deferred period of 4, 8, 13, 26 or 52 weeks. This means the longer you wait, the lower your monthly premiums will be. 

How much does income protection insurance cost?

Typically, most people will pay about £50 - £80 per month, with some policies even being as low as £10 per week. It’s also important to remember that short term policies are more affordable than long term policies, so keep this in mind when choosing the right one for you. 

As with all insurance policies, there are a range of factors that contribute to cost. The amount that you’ll pay each month will depend on things like:

  • Your occupation
  • Your age
  • The percentage you want to cover
  • The range of illnesses, disabilities and injuries you want to be included in your cover
  • Your health including current weight and family medical history
  • Whether you smoke or have smoked in the past
  • The deferred period on your policy

You can use the help of an online income protection calculator that can work out how much cover you need and give you an idea of how much your premium may be.

Get a quote through the specialist comparison site Activequote, which lists policies from all of the best insurers, including AIG, Aviva, Legal & General and Royal London.

How much income protection insurance do I need?

Choosing income protection insurance is a personal decision based on your circumstances. The amount of income insurance that you’ll need will differ from person to person, and there are many key factors that go into deciding which is best for you. 

However, there are several useful questions you can ask yourself to determine the right amount of cover:

  • Could you survive financially if you had no income? — If yes, how long could you survive for?
  • How many people are financially dependent on you? — Including your children, spouse or partner. 
  • Would you feel comfortable taking out a loan if you needed money? — It may be difficult to get by if you’re out of work and a loan can be a costly endeavour.
  • What would happen if you got ill and couldn’t afford to pay the bills? — Would you end up in debt if you can’t afford all of your monthly outgoing bills?
  • If you’re employed, do you have sick pay to fall back on? — How long would this be paid for? Statutory Sick Pay is only £96.35 a week.

If you have a family and a lot of outgoing payments but few savings or parents willing to offer a loan then it may be difficult to get by if you’re out of work, sometimes even if you are receiving sick pay.

Newly qualified dentists and doctors might be interested in income protection because when they start work in the NHS they’ll have less sick pay than colleagues who have been there for years. The longer they work for the NHS, the more sick pay they’ll get.

Who doesn’t need income protection?

Income protection isn’t right for everyone. Depending on your situation and circumstances, you may not need income protection if:

  • You can be supported by savings — This may need to last months or years depending on the level of injury or illness.
  • You’ll be covered by sick pay — Some employers will pay sick pay for longer than 12 months so it’s important to check with them or in your contract of employment.
  • You can survive on government benefits — Benefits can change at any time so it’s important to keep up to date on the gov.uk website. 
  • Your spouse, partner or family can support you — It’s important to remember that you may need their financial support for a long period of time so this will need to be factored in. 

Income Protection for the self-employed

People who are self-employed or freelance often consider income protection insurance as a viable option. This is because they typically won’t receive employee benefits like sick pay, which will easily protect them if something goes wrong. Most income protection policies are available to people who are self-employed, freelancers and contractors.

However, those who are self-employed may find it more difficult to make a claim or that the claims process may take longer. Typically, it’s much easier for someone who is employed by an organisation to prove that they’ve been made redundant or can’t do their job. 

Different insurers ask for different forms of proof when you make a claim. Some will only pay out for an unemployment claim if you can show you're on jobseekers allowance and looking for work. If you own your business you could have to provide personal and business account statements to prove a loss of income.

What is short-term income protection?

Short-term income protection works in the same way but the payout period will be shorter and occasionally it won't cover as many serious illnesses as income protection insurance. Different policies will allow you to choose short-term payout periods with typical options including 6, 12 or 18 months.

Activequote splits the policies you can search for into 'income protection insurance', 'redundancy insurance', 'accident and sickness insurance' and 'mortgage protection insurance'. There will be long- and short-term options within these categories.

Is income protection the same as PPI?

Let’s be clear: income protection isn’t the same as PPI. 

PPI —  sometimes known as payment protection insurance — was widely mis-sold during the 1990s and early 2000s. PPI was sold with credit cards, loans, mortgages, car finance and other types of credit and — depending on what product it was sold with — PPI was paid for in different ways. Whereas PPI covers a particular debt and any payouts are sent to the lender, income protection is a tax-free proportion of your income.

What’s the difference between income protection insurance and critical illness cover?

Income protection insurance and critical illness cover are two very different types of insurance cover. 

Income protection pays a percentage of your gross salary as a monthly payment until you’re fit to return to work. Critical illness cover, however, will usually be paid out in one lump sum payment if you’re diagnosed with a critical illness that’s covered in your policy. Typically, critical illness cover won’t payout if you die. 

What is mortgage protection insurance?

Mortgage payment protection insurance (MPPI) pays out in similar circumstances to income protection, however, it only covers loans and credit agreements like your mortgage. 

Mortgage payment protection insurance is designed to cover just mortgage payments rather than general living costs. Policies often cover mortgage payments for up to two years and tend to pay up to 65% of your monthly income or £2,000 — whichever is lowest.

Income protection insurance reviews

AIG Home

AIG Home offers income protection that it believes should be “the most suitable form of support for sensitive scenarios”. This is why it offers benefits for trauma, death and terminal illness. It also offers a wide range of features like: 

  • Up to £100 per night for hospital stays up to a maximum of 90 days.
  • Rehabilitation support.
  • A deferred period of 4, 8, 13, 26 or 52 weeks.

You can take out a policy from 5 to 53 years or up until your 70th birthday and you can receive monthly sums of between £500 - £1,500. 

On the reviewer website Trustpilot, AIG is rated 3.1 out of 5 stars with an overall rating of “Average”. However, this is for all of the products that AIG sells and isn’t just exclusive to its income protection insurance (correct as of January 2022).

Aviva 

Aviva income protection insurance offers flexible cover options that allow you to choose your monthly benefit, deferred period and policy length. 

It offers:

  • Rehabilitation support to help you return to work.
  • Fixed monthly premiums that stay the same for the term of your policy. 
  • One month’s back to work benefit when you return to work if your illness or injury means you’ll earn less than you did before.
  • A monthly sum of £500 - £1,500 subject to availability. 

On the customer review page Trustpilot, Aviva currently has a rating of 4.7 out of 5 stars with an overall rating of “Excellent”. However, this is for all of the insurance options that Aviva offers, not just its income protection insurance.

Legal & General

Legal & General income protection insurance offers a wide range of benefits. Its policy includes as standard:

  • Tax-free payouts after the deferred waiting period of 4, 8, 13, 26, or 52 weeks. The waiting period is decided by you. 
  • Cover that lasts until your chosen retirement age, however, you can still cancel at any time with no charge. 
  • You’ll receive your monthly benefit of up to £1,500 until you return to work or until your policy ends.

Legal & General also offers up to £150 per night for hospital stays, rehabilitation support and back to work benefits on its income protection insurance policy. 

On Trustpilot, Legal & General has a rating of 3.2 stars. It has an overall rating of “Average” based on over 11,200 reviews, however, this is based on all its insurance policies (correct as of January 2022).

LV=

LV=’s income protection insurance offers cover if you’re too ill to work due to injury, an accident or ill health. Its policy includes as standard:

  • Rehab support — Rehab support services to help return you to full health as soon as possible. 
  • Fracture cover — Included at no extra cost. A lump-sum payment of £2,200 depending on the type of bone fracture. 
  • Death benefits — Up to £10,000 in death benefits if you die four or more years after your policy starts. You’ll receive up to £5,000 if you die less within four years of the policy start date.
  • Parent and child cover — LV= will pay a lump sum if your child is diagnosed with a specific illness, operation or medical procedure. 

LV= also offers up to £1,500 benefit guarantee per month to help support your income should you not be able to work.

On Trustpilot, LV= has received a rating of 4.7 out of 5 stars based on all of the insurance options they offer. It has an overall rating of “Excellent” based on over 49,000 reviews (correct as of January 2022).

Nationwide

Nationwide’s income protection benefit is provided by Legal & General and aims to help cover rent, bills, everyday expenses or the mortgage. 

It includes:

  • Fixed monthly payment options throughout your policy.
  • Tax-free monthly payouts of up to £1,500. You can choose how soon you’d want your monthly payouts to start and how long the policy would run.
  • You can choose between Level Cover which is a monthly payout that stays the same or Increasing Cover which means your monthly payout would rise with inflation. This may end up costing you more.
  • Death benefits which would be an amount equal to 12 times the monthly premium. 

You must be aged between 18 and 59 years old, be a UK resident and be a Nationwide member to apply. 

On the reviewer website Trustpilot, Nationwide Building Society has a rating of 1.8 out of 5 stars with an overall rating of “Poor” based on over 2,700 reviews. It’s a similar story on Reviewcentre, with Nationwide scoring 2 out of a possible 5 stars. However, all of the reviews on both sites are for all of the cover options that Nationwide provides as well as reviews for its building society (true as of January 2022).

Royal London

Royal London’s income protection insurance gives you a helping hand when you need it most. It provides up to £150 per night for any hospital stays as well as back to work benefits and fracture cover as standard.

Royal London will cover up to 65% of the first £15,000 of your pre-tax earnings, plus up to 55% of the remainder.   

On Trustpilot, Royal London has received a rating of 1.8 stars out of 5 with an overall rating of “Poor”. This is for all of the insurance products that Royal London offer (true as of January 2022).

The Exeter

The Exter offers three premium levels of cover:

  • Level guaranteed — Premiums that stay the same for the life of the policy. This is available when the chosen waiting period is four weeks or longer. 
  • Age-costed guaranteed — Premiums that increase with age but the rates that determine the premiums won’t change.
  • Age-costed reviewable — Premiums that increase with age but are reviewed after three years.

The Exeter offers these different levels of cover so you’re able to choose a cover level that’s best for you. It also offers cover available from £500 to £10,000 per month, flexible waiting periods for NHS medical professionals and teachers as well as back-to-work benefits.

On Trustpilot, The Exter has a rating of 4.6 stars out of a possible 5. Based on over 600 reviews it received an overall rating of “Excellent” (correct as of January 2022). 

Vitality

Vitality offers a wide range of different income protection insurance cover levels that include; Income Protection Cover, Income Protection Cover Plus, Short Term Income Protection Cover and Public Sector Employee Benefit. Each level of coverage is different so it’s important that you pick the best one for you.

With Vitality’s standard income protection cover, you can receive:

  • Cover of up to £1,500 per month
  • Rehabilitation support should you need help in order to get back to work 
  • Up to £100 per night if you’re hospitalised
  • Assisted car support
  • Education support should you need training courses to help reskill
  • An increase of benefits by 10% should you become disabled

You must be aged 18 - 60 to apply.

On Trustpilot, Vitality has a rating of 4.2 out of 5 for all of its insurance products. Based on over 24,100 reviews it has an overall rating of “Great” (true as of January 2022).

Wesleyan

Wesleyan states that its income protection insurance is designed to “keep the money coming in when you’re off work through ill-health”. Its plan also includes:

  • Access to free healthcare and support services to get you back to work quicker.
  • Tailored, increased cover for doctors and dentists.
  • Up to £4,000 monthly sum.
  • Rehabilitation support should you need it. 
  • Monthly benefits when your sick pay ends, so your income is always covered.

Your policy can run up until your 70th birthday,

Wesleyan was rated 4.8 stars on the reviewer website Trustpilot based on over 700 reviews. This is for all of the insurance options that Wesleyan offers and so has an overall rating of “Excellent” (correct as of January 2022).

British Friendly Society

The British Friendly Society has a range of income protection-style products that can offer short-term cover for the self-employed, casual or part-time workers; cover for a child's education, and cover during sickness and injury.

Its more standard income protection plan is called Protect and is available for employed or self-employed people aged between 18 and 64.

It can payout up to 70% of your annual taxable income if a doctor says you are unable to do the main tasks of your occupation. You can choose short-term or long-term cover that pays a weekly benefit into your bank account to help replace any loss of earnings due to sickness or injury.

The British Friendly Society has a rating of 3.9 stars out of 5 on Trustpilot with an overall rating of “Great” (correct as of January 2022).

This article was written by ManyPets. We were not paid to write it but we will receive commission if clicking on a link to one of the named insurers results in a reader taking out a policy with that insurer. We also charge for advertising space so a particular insurer may be highlighted in the article and, where insurers are listed, it can dictate where they appear in the list.