What Is Income Protection?

Income Protection Insurance provides a regular monthly income if you're unable to work because of illness or injury.

Rather than paying a one-off lump sum, the policy can provide ongoing monthly payments until you're able to return to work, reach retirement age, or the policy term ends.

The payments can help cover:

• Mortgage repayments

• Household bills

• Food and living expenses

• Childcare costs

• Everyday financial commitments

For many homeowners, Income Protection can provide vital financial support when they need it most.

Why is it so important? 

Your income is what pays for everything else. If illness or injury stopped you working tomorrow, would you still be able to pay your mortgage and bills in six months? For many households, the answer is no.

Income Protection provides a financial safety net that can help protect your lifestyle and your home while you recover.

Especially Valuable for the Self-Employed

If you're self-employed, Income Protection can be even more important.

Many self-employed people don't have employer sick pay or workplace benefits to fall back on. If they can't work, their income can stop almost immediately.

Income Protection can help provide peace of mind that there will still be money coming in while you're off work.

Income Protection vs Life Insurance: What's the difference?

One of the most common questions people ask is whether they need Income Protection or Life Insurance. The answer is often both.

Life Insurance pays a lump sum to your loved ones if you die.

Income Protection Insurance pays a monthly income if you're unable to work due to illness or injury.

Life Insurance protects your family if you're no longer here. Income Protection protects your lifestyle, finances and mortgage while you're still here. For many families, Income Protection forms the foundation of a comprehensive protection plan.

Can Income Protection help protect your mortgage?

For most homeowners, their mortgage is their largest monthly commitment. If illness or injury prevented you from working for an extended period, keeping up with mortgage repayments could become difficult.

Income Protection Insurance can help ensure you continue receiving an income, helping you maintain your mortgage payments and protect your home during challenging times.

Do Income Protection policies actually pay out?

A common misconception is that Income Protection policies are difficult to claim on. In reality, the vast majority of claims are paid.

According to the Association of British Insurers (ABI), insurers paid a record £177 million in Income Protection claims in 2023, with 98.3% of claims paid.

Many claims relate to common conditions such as back pain, musculoskeletal disorders and mental health issues, conditions that can affect anyone at any stage of life.

Speak to Moat Mortgages about Income Protection insurance

Choosing the right Income Protection Insurance policy can be complicated. Different providers offer different levels of cover, waiting periods and policy features.

At Moat Mortgages, we help clients understand their options and find protection that suits their circumstances, budget and future goals.

Whether you're employed, self-employed, buying your first home or reviewing your existing cover, our experienced advisers can help you identify any gaps in your protection and recommend solutions tailored to your needs.