Long-term income protection insurance

Replace a percentage of your usual earnings with long-term income protection insurance.

Should you be unable to work due to illness or injury, a long-term income protection policy could pay out up to 70% of your income to help you keep up with your living costs.

Payments could last up until retirement age, unlike short-term income protection where payments are made for a maximum of 1, 2 or 5 years per claim.

Long-term income protection UK [key points]:

  • Could protect up to 70% of your usual earnings
  • Financially protects you against illness and injury
  • Payments are paid monthly and are tax-free
  • Make multiple claims throughout the policy lifetime or
  • Receive payments until the end of the policy term (if you’re unable to work again)
  • Premiums start from 20p-a-day through the advised team at Reassured ‡

Keep reading to find out everything you need to know about long-term income protection, including:

Why not use an experienced broker to compare long-term income protection quotes from the whole of the market?

By using Reassured to compare income protection you can receive personalised recommendations and fee-free quotes.

Start your journey and get in touch today. Quotes start from just 20p-a-day.

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What is long-term income protection?

Long-term income protection is an insurance policy which can help to replace a percentage of your income while you’re unable to work due to illness or injury.

Unlike short-term income protection, you have the potential to receive payments until your policy term comes to an end (which could be when you reach retirement age).

The main benefit of long-term income protection is that if your incapacity resulted in you being unable to return to work, you could still receive payments for the rest of your working life.

So, you can you rest assured that you could keep up with essential living costs while you’re off work, and have peace of mind that you and your family are protected no matter what life throws at you.

Compare multiple long-term income protection policies for free using Reassured.

What does long-term income protection cover?

With a long-term income protection policy, you’ll be financially protected against illness and injury that prevents you from working.

If you were to develop a serious condition that meant you were unable to work, you could claim on your policy and receive monthly payments.

With long-term income protection, you could make multiple claims throughout the policy lifetime or (if your incapacity prevented you from returning work) you could receive payments for the rest of the policy term.

What can I use long-term income protection for?

Long-term income protection can help you cover whatever you would use your usual pay cheque for.

The monthly payments you receive aren’t tied to a specific financial commitment, meaning you can use them for whatever you see fit.

Commonly, income protection payments are used to help with:

Mortgage

Rent/mortgage
Monthly accommodation payments
Bills And Utilities Pos Pink

Household bills & utilities
Gas, electric, internet, water
Transport Pos Pink

Daily living costs
Food shops, petrol, public transport
Debts

Monthly loan or debt payments
Credit cards, car finance, personal loans

How much long-term income protection do you need?

Enter your monthly financial commitments to understand the level of long-term income protection cover you might require.

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£723 a month is the average monthly mortgage payment in the UK, with the average monthly rental price coming in at £700.

The majority of our monthly income will go towards rental or mortgage payments.

For this reason, it’s essential to have precautions in place to ensure you could keep up to date with your payments if you weren’t receiving your usual income.

Monthly income protection payments can help to cover this large expense and ensure you can stay in your home.
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According to the Money Advice Service, the average household spends £340 a month on household bills.

This includes electricity, gas, TV and broadband.
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Childcare costs are on the rise with it now costing £137.69 per week for part-time nursery for a child under the age of two.

That’s over £550 per month - is this an amount you’d be able to keep up with if you were unable to work?

Becoming ill could also result in the need for additional childcare while you attend doctors’ appointments or medical treatment.
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The average household in the UK spends around £97 a week on their food shop, totaling £388 a month.

While this may seem like a small amount in comparison to some of the other expenses mentioned, the food shop is often where we try to scrimp and save when we fall on hard times.

Income protection can take care of the cost of your weekly food shop, as well as many other essential costs.
£
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At the beginning of 2020, credit card debt in the UK was at £2.1 billion, with almost 27 million UK residents in some kind of debt.

Becoming unable to work could make it hard to keep up with credit card or loan payments (including car finance or other financed goods).

Failure to keep up with payments could result in additional interest being incurred or late fees issues - resulting in a higher total needing to be paid.
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The average spent on public transport each month comes to an average of £94.

This includes the cost of public transport, as well as petrol and diesel vehicles.

While this amount may reduce while you’re unable to work as you won’t need to commute there may be additional spending on public transportation if your illness or injury leaves you unable to drive.
£
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Your total cover estimate

£ 0

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Why would I need long-term income protection?

If you’d struggle to make ends meet while you were unable to work for an extended period, due to long-term illness or injury, income protection could be beneficial to allow you to maintain your current standard of living.

Without income protection, if you were to fall ill, you’d need to rely on sick pay, employment support and allowance and/or personal savings to get by.

  • Statutory sick pay (SSP) could provide you with £116.75 per week for up to 28 weeks[1]
  • Employment and support allowance (ESA) could provide you with up to £90.50 per week or £138.20 per week if you’re unable to return to work[2]
  • Research by the FCA (Financial Conduct Authority) shows that around 30% of people in the UK have no savings[3]

Would this be sufficient to help you cover your essential financial commitments and key living costs?

While income protection won’t cover your whole income, the percentage it pays out could help you to cover essentials such as rent/mortgage and bills.

Particularly when securing long-term income protection, the payments could last for the rest of the policy term (which could be until you reach retirement age) giving you peace of mind that you could be covered for the rest of your working life.

Those who may benefit from long-term income protection include:

  • The self-employed
  • Freelance workers
  • Those who don’t receive full sick pay
  • Those who don’t have any savings

Contact a friendly member of the Reassured team to find out if long-term income protection is the right option for you.

Simply get in touch for expert advice and a fee-free income protection comparison service.

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What’s the best long-term income protection?

The best long-term income protection will be the policy that meets your needs and is at an affordable price.

Policies can vary between providers, such as the percentage of your income they’ll pay out and additional benefits offered.

Therefore, it’s essential to compare multiple quotes to ensure you’re getting the best policy for your personal circumstances.

To understand whether a policy is right for you, there are some important policy terms and conditions you should be aware of:

Income protection terminologyDefinition
Benefit amountYour benefit amount is what will be paid out to you on a monthly basis if you made a valid claim. Also known as your cover amount or monthly benefit.
Policy termThe policy term is how long your cover will last. You have the freedom to choose a policy term to meet your needs but, typically, cover will need to cease by your 70th birthday.
Definition of incapacityThe definition of incapacity listed in your policy will outline what you can make a claim for. Most policies come with an ‘own occupation’ definition which means you can claim if you’re unable to do your own job.
Deferred periodYour deferred period is a specified period which must pass in order for your payments to commence. You must still be unable to work once this period has come to an end in order to receive monthly payments.
Payment periodThe payment period is how long your policy will pay out for. In the case of long-term income protection, you could receive payments for the rest of the policy term.
Premium typeYour premium type is how you’ll pay for your cover. Premiums can be guaranteed (remain the same), reviewable (change over time) or age-based (change overtime due to your age).


Compare fee-free quotes through Reassured to find the best policy for your needs.

How much does long-term income protection cost?

The price you pay for long-term income protection will depend on your personal circumstances and the insurer.

Insurers require you to provide key details during the application process. They will then use these details to calculate your monthly premium price.

The information required includes:

  • Age
  • Health & wellbeing
  • Smoking status
  • Lifestyle
  • Occupation
  • Policy term
  • Deferred period
  • Definition of incapacity
  • Premium type

For more information read our income protection insurance calculator article »

The table below shows example quotes for a long-term income protection policy.

Quotes are based on a non-smoker, in good health, with an annual income of £30,000. Cover is until age 65, with a 3 month deferred period:

AgePrice per month
20£8.27
25£10.17
30£12.04
35£14.98
40£19.56
45£28.94
50£42.10


Contact Reassured to compare fee-free quotes from the whole of the market.

Quotes start from just 20p-a-day.

How much does long-term income protection pay out?

Long-term income protection could pay out up to 70% of your usual income in monthly (tax-free) payments.

The exact amount that’s paid out will depend on your income and the terms and conditions of your chosen provider.

Reassured can compare quotes from all UK insurers, allowing you to find the best income protection insurance for your needs at the right price for your budget.

This includes insurers who could pay out up to 70% of your income.

Simply get in touch for your free quotes.

Can I get long-term income protection if I’m self-employed?

Yes, it’s possible to secure long-term income protection as a self-employed worker.

In fact, as the self-employed don’t benefit from financial aid from an employer (such as sick pay) they are likely to benefit the most from having income protection in place.

Without income protection in place, you’d likely need to rely on your own savings or government support, like ESA.

By securing an income protection policy you could provide yourself with your own form of sick pay - giving you peace of mind that you can still earn an income while you’re unable to work.

In particular, long-term income protection could provide you with payments for the rest of your working life if your incapacity meant you were unable to return to work.

Why not speak to a friendly member of the Reassured to find the best income protection for self-employed workers?

Quotes are fee-free and without obligation.

What’s the difference between long-term and short-term income protection?

Both long-term and short-term income protection could pay out up to 70% of your income while you’re unable to work due to illness or injury.

The main difference between the two is how long you’ll receive monthly payments for.

With long-term income protection, you have the potential to receive payments until the end of the policy term.

Whereas, with short-term income protection, you’ll receive payments for a maximum of 1, 2 or 5 years (depending on the insurer).

The price that you pay for cover also differs. As you could receive payments for a much longer time, long-term income protection tends to be slightly more expensive.

The table below shows a price comparison between long-term and short-term income protection.

Quotes are based on a non-smoker in good health with an annual income of £30,000. Cover is until age 65, with a 3 month deferred period:

AgeLong-term price per monthShort-term price per month
20£8.27£5.00
25£10.17£5.00
30£12.04£5.68
35£14.98£6.76
40£19.56£8.22
45£28.94£10.49
50£42.10£11.87


Reassured can help you conduct a long-term vs short-term income protection comparison to help you find the right policy for your needs.

Compare Fee-Free Quotes from Major UK Insurers »

What’s the difference between long-term income protection and critical illness cover?

Long-term income protection and critical illness cover can both pay out to you to help replace lost income.

However, they provide cover in different ways.

With long-term income protection, you’ll need to develop an illness/injury that prevents you from working in order to receive monthly income payments.

Whereas, with critical illness cover, you’ll need to be diagnosed with a specific condition that’s listed within your policy to receive a lump sum pay out.

Below is a summary of the key differences between income protection vs critical illness cover:

Income protectionCritical illness cover
Can help you to replace lost incomeCan help to replace lost income
Covers you for illness and injury that prevents you from workingCovers for you for specific serious illnesses
Pays out in monthly (tax-free) paymentsPays out in one tax-free lump sum
Easy to budget monthly paymentsCould be hard to budget a large lump sum
Not guaranteed to cover all your monthly financial commitmentsCould help to cover more expensive financial commitments
Can’t be added to life insurance but can be taken out simultaneouslyCan be added to life insurance for an additional cost
No specific list of illnesses/injuries included in the policySpecific list of conditions included in the policy
Available from 20p-a-day through the advised team at Reassured ‡ Can be taken out from 33p-a-day through Reassured º


Comparing multiple forms of cover is the best way to find the right option for your needs.

Reassured can help you compare income protection, life insurance and critical illness cover.

Get in touch today to discover all your available options, free of charge.

Compare long-term income protection

Comparing long-term income protection can help you find the best policy to meet your needs at the right price for your budget.

When using Reassured's advised service, you can compare quotes from the whole of the market.

Not only does this mean you can gather information about all your available options, but you can also find the most affordable policy.

Long-term income protection starts from just 20p-a-day so why not get in touch?

All quotes are fee-free and without obligation.

Compare Long-Term Income Protection » Find Your Best Quotes

Sources:

[1] https://www.gov.uk/statutory-sick-pay

[2] https://www.gov.uk/employment-support-allowance/what-youll-get

[3] https://blog.moneyfarm.com/en/investing-101/average-savings-by-age-in-the-uk-how-much-should-you-be-saving/

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