Each year one million people in the UK find themselves unable to work due to a serious illness or injury (ABI 2017).

Income protection insurance (sometimes known as permanent health insurance) is a long-term insurance policy designed to help you if you can not work because you are ill or injured.

It ensures you continue to receive a regular income until you retire or are able to return to work.

  – It replaces part of your income if you can not work because you become ill or disabled

  – It pays out until you can start working again or until you retire, die or the end of the policy term – whichever is sooner

  – There is often a waiting period before the payments start. You generally set payments to start after your sick pay ends, or after any other insurance stops covering you

  – It covers most illnesses that leave you unable to work either in the short or long term

  – You can claim as many times as you need to while the policy lasts.

It is not the same as critical illness insurance, which pays out a one-off lump sum if you have a specific serious illness.

Do you need it?

According to the ABI, one million workers a year find themselves unable to work due to a serious illness or injury.

It doesn’t matter whether or not you have children or other dependants. If illness would mean you couldn’t pay the bills, you should consider income protection insurance.

IWP advisers will discuss the different plans available.