Income protection insurance can be a valuable and often essential financial safety net if you become unable to work due to illness, an accident or injury. It can crucially help replace a sizeable proportion of your income, so that you can continue to pay your mortgage, rent, household bills and other important financial obligations.

Whether or not income protection is worth the cost generally depends on your individual circumstances, such as income, occupation and your financial situation. If you are the sole earner in your household or if you have numerous financial commitments, then income protection could be a good financially prudent option for you.

The cost of income protection insurance will vary considerably depending on several key factors, such as age, occupation, health, and the level of cover you choose. As a rule, you can expect to pay around £10 – £100 per month for income protection insurance, depending on the level of cover required.

An income protection policy will pay out a financial amount either weekly, monthly or periodically, if you become unable to work due to illness, an accident or injury. The benefit amount will depend on the terms and the level of premiums you pay into your policy. The primary purpose is to protect employees, contractors or self employed individuals who can’t work for a period of time.

Income protection insurance typically covers a wide range of the most common illnesses & injuries, including:

• Cancer
• Heart attacks
• Strokes
• Broken bones and sprains
• Minor and major surgery
• Long-term disability
• Musculoskeletal
• Some forms of mental illness

Some Income protection policies may also cover redundancy and/or pre-existing conditions, although this is not always the case.

This is often difficult to answer, as the best income protection insurance for you will depend on your individual circumstances and policy requirements. It is important to compare policies from different insurers and speak to a specialist to evaluate your options and find one that offers the right level of cover at a competitive price.

This depends on the type of policy you opt for. However, in general, income protection insurance does not cover every type of illness and injury. Some common exclusions include:

• Pre-existing conditions
• Self-inflicted injuries
• Some life long medical conditions

There are a few potential disadvantages to income protection insurance, including:

• The premiums can be expensive, depending on the level of cover required.
• There may be a specified waiting period before you can claim benefits.
• You may have to undergo a medical examination.
• Your policy may be terminated if you make a false, incomplete or misleading statement.

Some income protection policies specifically cover redundancy, but some do not. If you are considering taking out income protection insurance, it is important to check whether redundancy is covered. Alternatively ask for a quote covering redundancy.

Critical illness cover is a different type of income protection insurance that specifically pays out a lump sum, if you are diagnosed with a critical medical illness, such as various types of cancers, heart conditions, strokes and brain tumours. This financial payout can be used to cover your financial needs, such as medical expenses, mortgage payments, or childcare costs.