Protecting your income

Protecting your income is one of the most important things you can do to ensure that you and your family are financially secure if you were unable to work due to suffering a serious illness or injury.

For most people their sick pay and/or savings will only last for so long, and consideration needs to be given to servicing your outgoings in the event that you cannot return to work before your sick pay stops or your savings run out.

An income protection plan is designed to provide you with a regular income if you are unable to do your job due to illness or injury, ensuring that you can continue to pay your mortgage and service your outgoings.

This type of policy can provide you with cover of up to 60% of your pre-tax income and the benefit amount is paid to you tax free.

You can choose the level of cover that you would like up to the maximum limit, how long you would like the cover to be in place for, and also when you would like the policy to start paying out in the event that you cannot work due to illness or injury.

Should your income increase over the years, the level of cover can also be increased.

When you are in a position to return to work, the policy would stop paying you, although some policies provide a stepped benefit, meaning that if you are only fit enough to return to work on reduced hours, the policy would ‘top up’ your income to assist with the transition back into the workplace.

At the end of the claim period the policy stays in place should you ever require to claim on it again, and will even cover you for the same condition that you may have already claimed for. Unlike car and home insurance, the premiums do not increase if you have made a claim.

This type of policy is available to you whether you are employed or self-employed. 

An Income Protection Policy explained

Deferred Period (waiting period)

You can choose the deferred period which is the length of time before the policy starts to pay out. These are generally set in line with your sick pay entitlement. Standard deferred periods are 4, 8, 13, 26, and 52 weeks.

In the event that you do not have sick pay, or if you are self employed, you would need to consider how long you could manage without an income in order to set the deferment period. The longer the deferment period is, the lower the monthly premium.

Policy Term

The term of the policy is dictated by you and is usually tailored in line with your retirement age. If you are unsure of your retirement age, it is quite common for people to select age 65. If you were to retire before then, the policy can be stopped as their will no longer be a requirement for the cover if you are no longer working.

Indexation option

Adding this option to your income protection policy means that your monthly benefit and premium will increase each year. The insurer will write to you well in advance every year to notify you of any changes to your monthly benefit and premium. 

With most insurers the increase is set in line with the Retail Price Index (RPI), although it can be set with some insurers to increase by a set percentage each year.

This is worth considering as when the cost of living increases each year, your benefit amount will also increase to protect your income against inflation.

Monthly Cost

The cost of your policy is determined by a number of factors including what you are comfortable paying each month.

The main factors that would dictate the premium for an income protection policy are as follows:






Medical history


Level of cover


Deferment period


Smoker status

Our protection specialist at West End Mortgages will identify the best policy for you, selected from the whole of the market and we will work with you to tailor the policy to suit your needs. We will also provide advice and guidance around the deferment period and the level of cover required ensuring that we put a policy in place that suits your needs.