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What is long term income protection insurance?

Find out if longer term cover could be a good choice to protect you and your loved ones

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 16 October 2022

6 min read

What is long term income protection insurance?

Income protection insurance can be very helpful, but let’s be honest it’s not always the easiest type of insurance to understand. There are a range of different types of cover to protect your income, which can make it harder to decide what is right for you.

The 4 main types of income protection insurance are:

Long term cover seems like a great idea, meaning you can claim for years and years at a time if you can’t work due to illness or injury. But do you need this much cover and are there pros and cons? This is what we aim to help you work out in this guide.

Long term income protection insurance explained

Long term cover sounds like a great idea doesn’t it, giving you and your family financial security for years to come. But there are a few pros and cons to consider before deciding whether short term or long-term income protection is the best choice.

The key facts about long term income protection are:

  • You can claim if you are left unable to work for 4 or more weeks due to being sick or injured (signed off by a doctor or GP)
  • Your policy can cover you for as many years as you choose, right up until you retire!
  • Your policy will pay out to you as regular tax-free monthly payments when you claim, to cover part of your usual monthly income
  • The monthly benefit payments you receive after claiming will generally cover anywhere between 50%-70% of your normal monthly income (most often around 60%)
  • You can receive policy pay outs for years at a time, meaning you could claim for 5 years, 10 years, 15 years or right up to retirement age if needed
  • Your cover will remain in place as long as you pay for your policy each month

Note: Most insurers will require your policy to cover you for at least 5 years, but you can choose how long you want your cover to last for beyond that point.

What does long term income protection cover you for?

Of course, you will want to know what exactly you will be covered for with this type of insurance policy. With long term income protection, you can claim:

  • If you are signed off work due to illness or injury for 4 weeks or more by a doctor or GP
  • For a range of different medical conditions and injuries, provided they prevent you from working as normal

How much does long term income protection insurance cost?

Longer term cover can be great, offering peace of mind that you won’t struggle financially if your health leaves you unable to work. It does come with the downside though that it’s most likely going to cost you a little more. If your budget is tighter, it is worth considering if you need this much cover, as short term income protection will generally be cheaper.

It’s frustrating when you end up paying more than you should though, and there are a few things that will affect how much you pay:

  • How old you are when you apply (generally the younger you are when buying insurance, the cost will be lower)
  • If you smoke or not
  • How much cover you need (how much you want the claim to pay out each month)
  • The length of policy you choose (choosing to be covered for less time can be cheaper)
  • The insurer that you choose for your policy (prices can vary)
  • Your job role (is it high risk? If so, cover might cost more, or you could even be declined)
  • Your medical history and any conditions you have
  • How long your ‘deferred’ period is (the waiting period between claiming and receiving the first payment)

RECOMMENDATION: We would always recommend checking the prices across a few different providers, even if you think you are getting a great deal. Sometimes a little more digging can reveal another provider offering the same cover for a fraction of the price.

Long term income protection vs short term income protection

Short termLong term
Will cost less compared to a long-term policyCan be more expensive
Will have a maximum amount of time you can claim for (usually 12 or 24 months)Will pay out for the entire length of policy if needed (means you could claim for many years if you suffered from a very serious illness or injury)
Can claim multiple times during the policy with most providersCan claim multiple times during the policy with most providers
Will stop paying out after your claim period ends, even if you’re still not ready to return to working as normalCan pay out until you either return to work, your policy term ends, or you retire from your job (whichever one happens first)

Long-term income protection insurance pros and cons

Very extensive coverWill usually cost more than other forms of income protection
You can receive claim pay outs for many years (as long as you need!) until you return to work, your policy ends, or you retireCan be more expensive if you are older, have one or medical conditions, have a dangerous job or high-risk hobby.
Can claim for a variety of different illnesses and injuries (if they prevent you from working as normal)Most policies will include a ‘deferred’ period which is a waiting period before your claim will begin paying out
You can take as many years as you need to recover if you have become very seriously ill or injuredShort term cover can be more cost-effective
Flexible levels of cover to suit different budgetsDepending on your health or job role, some insurers could decide not to offer cover

If you’re looking for a policy that will pay out for a longer amount of time, your first question is probably about which insurers will offer this type of cover.

Currently, some of the insurers you can get long term income protection from include:

  • Aviva
  • LV= (Liverpool Victoria)
  • Royal London
  • AIG
  • Vitality
  • The Exeter
  • And more…

If you have ever heard the myth that self-employed people can’t get income protection, you’ll be pleased to find out this isn’t true. In fact, pretty much anyone with a job can get income protection whether they work for themselves or an employer.

Income protection insurance can cover job roles including:

  • Doctors
  • Dentists
  • Vets
  • Teachers
  • Contractors
  • Sole traders
  • Freelancers
  • Business owners
  • And more…

What can’t you claim for with income protection insurance?

It is important to know there are a few things that most income protection policies will not pay out for. These are:

  • Being dismissed from your company
  • Being made redundant by your employer
  • Anything that your policy ‘excludes’

Note: A policy ‘exclusion’ refers to anything your insurance provider will not allow you to claim for, such as being off work due a medical issue you already had when you applied or a dangerous hobby. Don’t worry, if your insurer wants to put an exclusion on your cover, they will tell you this when you apply.

EXAMPLE: James has found a long-term income protection policy that seems perfect for the cover he needs. He tells the insurer when he applies that he likes to go mountaineering in his spare time.

They class this hobby as ‘dangerous’ and so will not allow him to claim on his policy if he is injured when taking part in this activity. He can however claim for many other illnesses and injuries that prevent him from working including:

  • Car accident
  • Trips and falls (not related to mountaineering)
  • Cancer
  • Stroke
  • Heart attack
  • And more…

There are a few different options when it comes to buying income protection insurance policies, which means you can choose the way that is easiest for you.

  • You can apply with an insurance company directly (could be an appealing choice if you already have a policy with them such as life insurance)
  • You can compare pricing on a price comparison website
  • You can get help and advice from an insurance expert

It can be helpful to get some support from an insurance advisor, particularly if you’re not sure exactly what you’re looking for. They can help find you a better price or even a more suitable policy for the cover you need (e.g. critical illness cover) in some cases.


Safe Workers – Average sick days in the UK 2022

Statista – Sickness absence rate in the UK 1995-2021

Citizen’s Advice – Check if you can get sick pay

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