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Best income protection insurance provider

Income protection insurance is designed to provide you with a proportion of your regular income in the event you are unable to work due to ill health or an accident.

Our list of the best income protection providers features top performers on cost, percent of successful claims, and customer service. But if you’re not ready to make a choice yet, here’s our guide to everything you need to know about income protection insurance.

check Fact Checked
  • By Clare West
  • Published: January 23, 2025
  • Edited by: Antonia Medlicott
  • Disclosure
  • Last Update: 1 month ago

My quick list

4.0/5

LV= – LV= offers Own Occupation cover, and Homemaker cover. As with most LV= insurance products, you can expect excellent coverage and additional benefits with these income protection plans.

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Up to £250 worth of eGift vouchers when you join (t&cs apply)

4.0/5

Guardian – Guardian products are provided by Scottish Friendly. Guardian offers a choice of level cover and increasing cover.

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Large number of conditions and operations covered

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Access to a GP 24/7 and experts for medical second opinions

3.0/5

Aviva Wealth – Aviva’s income protection insurance is called Living Costs Protection.

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Capital at risk.

4.0/5

LV=

– LV= offers Own Occupation cover, and Homemaker cover. As with most LV= insurance products, you can expect excellent coverage and additional benefits with these income protection plans.

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Up to £250 worth of eGift vouchers when you join (t&cs apply)

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Reasons to use

  • Maximum cover is £20,833 per month (level cover) / £14,583 per month (inflation-linked cover)
  • Fracture cover included at no extra cost
  • Death benefit included
  • Premiums can be waived during involuntary unemployment for up to 6 months
  • Back to work support
  • Teachers Sick Pay Guarantee
  • Special features for doctors and surgeons
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Reasons to avoid

  • Premiums can be more expensive than competitors
  • Only covers a maximum of 60% of pre-tax income

Clare says

LV= offers Own Occupation cover pays out if you are unable to do your own job, even if you could earn money in another type of job. It is the highest level of cover.Own Occupationinfo cover which provides the highest level of income protection as it pays out even if you could earn money in another job. LV= also offers Homemaker cover. Homemaker cover pays out if, because of an accident or sickness, you are unable to prepare a meal or do basic housework.

With LV=, you can choose from level cover (your cover amount remains fixed for the length of the policy) or inflation-linked cover (where the amount of cover rises with inflation) and you can claim a really high level of cover: up to £20,833 a month for level cover and £14,583 for inflation- linked cover. (The limit is £1,500 per month for Homemaker cover). That makes LV= a good option for high earners.

LV= policies come with plenty of benefits, in this case, parent and child cover, which provides peace of mind that LV= will pay a lump sum equal to six times your amount of cover if your child is diagnosed with a serious illness.

Other benefits include fracture cover at no extra cost, which pays out up to £2,200, if you suffer a bone fracture, and death benefit, which pays £5,000 if you die within the first four years of the policy, or £10,000 if you die after that.
Although LV= often isn’t the cheapest option, it also offers budget versions of both types of cover, which have all the same features as the standard plans, but only pay out for a maximum of 12 or 24 months per claim instead.

  • Deferral period: Choose from 1 / 2 / 3 / 6 / 12 months
  • Maximum age: 70

4.0out of 5

point Up to £250 worth of eGift vouchers when you join (t&cs apply)
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4.0/5

Guardian

– Guardian products are provided by Scottish Friendly. Guardian offers a choice of level cover and increasing cover.

point

Large number of conditions and operations covered

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Access to a GP 24/7 and experts for medical second opinions

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Reasons to use

  • Low-cost plans
  • Own occupation cover: highest level of protection
  • Choice of a set 2-year payment period, or a payment period that lasts as long as the policy
  • Maximum cover is £250,000 per year
  • Hospital stay cover included in all policies
  • Premium waiver included in all policies
  • Break from premiums if you’re on parental leave or a sabbatical
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Reasons to avoid

  • Maximum cover decreases the higher your earnings: 65% of your annual earnings up to £60,000; 50% of annual earnings over £60,000; 45% of any annual earnings over £100,00
  • No fracture cover or death benefit included as standard

Clare says

Guardian is a strong option if you’re looking for a low-cost provider. It offers a choice of level cover (where your cover amount never changes) or inflation-linked cover.

If you are unable to do your own occupation due to illness or injury, you’ll get a monthly or weekly payment amount to cover a set portion of your lost income. Own Occupation cover pays out if you are unable to do your own job, even if you could earn money in another type of job. It is the highest level of cover.Own Occupationinfo cover provides the highest level of income protection as it pays out even if you could earn money in another job.

With Guardian, you also get a choice of payout options; either a fixed 2-year payment period, or a full-term payment period. This determines the length of time your policy will continue making monthly payments if you remain too ill to work.

With a 2-year payment period your policy will pay out until you’re able to return to work or for a maximum of 24 months. With a full-term payment period your policy will pay out until you’re able to return to work or until the end of your policy term.

Even though Guardian is a low-cost option, it comes with some potentially valuable benefits. Hospital cover, for example, pays out £150 for every night (up to 90 consecutive nights) that you’re admitted as an in-patient in a UK hospital (minimum of 7 nights to be eligible). And there are options for covering different rates of sick pay from your employer. For example, if you receive full pay for 26 weeks and then half pay for 26 weeks, you can take out two Income Protection plans: one with a 26-week deferred period and another with a 52-week deferred period, so that you can tailor the cover amounts to make up the shortfall to the maximum allowed.

  • Deferral period: Choose from 4 / 8 /13 / 26 / 52 weeks
  • Maximum age: 70

3.0/5

Aviva Wealth

– Aviva’s income protection insurance is called Living Costs Protection.

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Capital at risk.

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Reasons to use

  • No limit to the number of claims you can make
  • ‘Back to work’ benefit pays out if you’ve had to switch jobs or reduce your responsibilities due to incapacity
  • Premiums can be waived during involuntary unemployment
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Reasons to avoid

  • Payments limited to 12 months for each incapacity
  • Maximum cover you can claim is £1,500 per year

Clare says

Aviva’s plan has a limited payment term of 12 months per incapacity, but if you go back to work for at least six months after an incapacity, you can claim for the same or a different illness again. And there is no limit to the number of claims you can make.

You won’t get as many benefits as standard with Aviva as you do with LV=, but fracture cover is available for an extra cost, as is global treatment cover, which will cover the cost of world-class treatment options that you need to travel abroad for.

You also won’t be able to claim as much cover as with LV=. The maximum payment amount you can receive per month here is just £1,500.

  • Deferral period: Choose from 4 / 8 / 13 / 26 weeks
  • Maximum age: 71

Scores

Fees:

3.0

Trading platform:

4.5

Account opening:

4.5

Research:

3.0

Education:

3.0

Customer service:

2.5

Read Clare’s full review of Aviva Wealth

Read full review

* Wondering whether we get paid for writing good things about platforms? Good question! It’s how many comparison sites get paid.

The answer is – no, we proudly do things a little differently at Investing Insiders. Our sole criteria is what’s best for you – the consumer. So, although we do receive a commission if you choose to click through and open an account from any of our reviews, we will never bend our opinions to suit the requests of providers, or the needs of our bank balance. Bottom line – what you read on this page is what I’d recommend to my family, friends and colleagues, and indeed, what I choose for my own money.

Guide to income protection insurance

What is income protection insurance?

A payout from income protection insurance provides you with regular sums of money to replace the income you would lose as a result of ill health or an accident. It is designed to protect your finances while you recover.

It is a safety net that allows you to maintain your standard of living with minimal disruption if your ability to earn is interrupted.

What is the difference between ‘Own Occupation’ cover and ‘Suited Occupation’ cover?

Own Occupation cover pays out even if you could earn money in another job.

Suited Occupation policies provide less coverage. With a Suited Occupation policy, insurers may not pay out if they believe you could return to work in another role that suits your skills, training, or experience.

How much will I receive?

Income protection insurance typically pays out 50-70% of your usual pre-tax income.

You cannot take out more cover than you currently earn after tax and National Insurance contributions, but how much you choose to cover of your normal income is up to you. Maximum payment amounts do vary between providers, though.

What is the ‘deferred period’?

When you apply, you’ll be asked to choose how long you want your ‘deferred period’ to be – that’s the period of time you’ll need to wait before payments begin.

Waiting periods generally range from 4 weeks to 12 months, but can be adjusted to fit your individual needs. Generally, the longer the deferred period, the cheaper your premium, but the longer you’ll have to wait until your first payment. So, it’s important to think carefully about how long you could manage without your regular income before needing assistance.

Do I need income protection insurance?

If you worry that losing your ability to work would result in your finding it difficult to keep up with expenses, then income protection insurance could provide you with peace of mind and a lifeline.

It can be particularly beneficial if you:

  • Are self-employed
  • Won’t receive sufficient sick pay to cover your expenses
  • Haven’t built up enough in personal savings to cover a period out of work
  • Don’t have another source of income (e.g. partner’s wages) that could cover the shortfall if you stopped earning

When does income protection insurance pay out?

The terms and conditions under which an Income protection insurance will pay out will vary from provider to provider, so it is important to carefully check the specifics of any policy you are considering. However, there are some common exclusions, which providers will not pay out for. Examples include:

  • Pre-existing conditions
  • Death of the policyholder
  • Unemployment
  • Redundancy
  • Self-inflicted injuries
  • Illnesses or injuries resulting from alcohol or drug abuse

How long will I receive payments for?

Payments typically continue until you return to paid work or you retire, but you’ll need to check the specific terms and conditions of any policy you are considering for a definitive answer on this. Different providers operate in slightly different ways. Some policies specify a set amount of time, such as two years, after which payments will stop.

Providers will also stipulate conditions about when they consider you to be ready to return to work, so again, check the t&cs carefully.

Are there any restrictions on what the money can be spent on?

Most people use income protection insurance to help with the cost of:

  • Rent or mortgage payments
  • Household bills and utilities
  • Childcare costs
  • Credit card or loan repayments
  • The cost of other activities or items that you would struggle to do without

However, there are no restrictions on how the money is used.

How much will income protection insurance cost me?

Your premiums (the ongoing payments for your cover) will vary depending on a number of different factors. They include:

  • The length of cover
  • The length of the waiting period (deferred period)you select
  • Your age
  • Your health
  • Your personal and family medical history
  • Your occupation
  • Whether you participate in any risky activities
  • Whether you are a smoker
  • How much alcohol you drink

Remember: Insurance policies will only provide cover as long as you continue to pay your premiums.

FAQs

No, the payments are received tax-free.

Yes, receiving income protection insurance may impact your eligibility for certain means-tested government benefits. For example, your Universal Credit entitlement may be reduced. However, this is a complex issue and we advise seeking advice from a financial advisor or benefits specialist if this is something you have concerns about.

Insurance policies are only valid as long as you continue to pay your premiums. If you stop, the policy will be terminated. If you are in financial difficulties, however, and struggling to afford your premiums, speak to your insurance provider as there may be alternatives to cancelling the policy. Some providers allow payment breaks, and there may be a possibility of transferring to a cheaper plan that means you don’t lose your cover altogether.

No. The lump sum you receive from a critical illness claim isn’t classed as income, so it is tax-free.

Insurance policies are only valid as long as you continue to pay your premiums. If you stop, the policy will be terminated. If you are in financial difficulties, however, and struggling to afford your premiums, speak to your insurance provider as there may be alternatives to cancelling the policy. Some providers allow payment breaks, and there may be a possibility of transferring to a cheaper plan that means you don’t lose your cover altogether.

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