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

• It replaces part of your income - if you can’t 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’s 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. The longer you wait, the lower the monthly premiums.

• It covers most illnesses that leave you unable to work - either in the short or long term (depending on the type of policy and its definition of incapacity).

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

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

It’s not the same as short-term income protection, which also pays out a monthly sum related to your income, but only for a limited period of time (normally between two and five years) and can cover fewer illnesses or situations.

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 in-surance.

You’re most likely to need it if you’re self-employed or employed and you don’t have sick pay to fall back on.

Check what your employer will provide for you if you’re off sick.

You might not need income protection insurance if:

• You could get by on your sick pay. For example if you have an employee benefits package which gives you an income for 12 months or more.

• You could survive on government benefits. But they might not be enough to cover all your outgoings.

• You have enough savings to support yourself. Remember that your sav-ings might need to see you through a long period.

• You could take early retirement. If you’re near retirement age, perhaps you could afford to retire early. If you’re unable to return to work you might be en-titled to take your pension early.

• Your partner or family would support you. Perhaps your partner has enough income to cover everything the two of you need.

How much you pay each month will depend on the policy and your circumstances.

Usually income protection insurance covers a wide range of illnesses and situations and has the potential to pay out for many years.

The cost of a policy will vary based on a number of factors, including:

• Age

• Job

• Whether you smoke or have previously smoked

• The percentage of income you’d like to cover

• The waiting period before the policy pays out

• The range of illnesses and injuries covered

• Health (your current health, your weight, your family medical history)