Life can be unpredictable. From accidents to illness, life sometimes throws things our way that we don't expect. That's where life insurance and income protection insurance come in. They can give you or your family the money needed to stay afloat when things get tough.
Life insurance is a type of insurance policy that pays a lump sum to your loved ones if you die while the policy is active. That money can be used for things like mortgage payments, childcare, or other household bills.
There are different types of life insurance, including:
Term life insurance – This covers you for a set number of years. If you die during that time, your family gets a pay out.
Whole of life – This covers you for your entire life and guarantees a pay out.
Life cover with critical illness cover – This pays a lump sum if you're diagnosed with a serious illness.
Mortgage protection – This helps your family keep up with the mortgage payments if you pass away.
These policies offer financial protection for your family if something happens to you.
Income protection insurance gives you a monthly income if you're too ill or injured to work. This payment continues until you can work again or until your policy term ends.
It's especially important for the self-employed or people who don't get much statutory sick pay.
Here's how it works:
You choose a deferred period, which is the wait time before your payments begin.
You pay a monthly premium to your insurance company.
If you can't work, you file a claim. Once the waiting period ends, you'll receive your income protection payments.
Your level of cover and chosen income protection policy will determine how much money you get.
They both offer financial support, but in different ways:
Life insurance pays out a tax-free lump sum if you die.
Income protection cover provides a regular income when you're unable to work due to illness or injury.
Some people also choose critical illness insurance to go with these for even more protection.
You have dependents who rely on your earnings
You want to protect your family's home and lifestyle
You want to leave something behind for your loved ones
You're self-employed or don't get full sick pay
You have bills like mortgage payments or monthly payments
You want to keep up with outgoings during tough times
It's worth applying while you're young and healthy. A history of health conditions or mental health issues can make it harder to get a good insurance policy later.
When choosing a policy, look at the details:
This is the waiting period between stopping work and getting paid. A longer deferred period usually means lower monthly premiums, but you need savings to get through it.
This means your insurance work will pay out if you can't do your specific job—not just any job. It's a good choice for most people.
This is how long your type of policy will last. Make sure it covers you for as long as you'll need it.
Think carefully about how much cover you need. Look at your bills, childcare, and cost of living. Choose a type of cover that fits your needs.
Some policies won't cover pre-existing medical conditions or specific health conditions. Read everything carefully.
The cost of income protection insurance or life insurance depends on:
Your age and health
Your medical history
Whether you smoke
Your job and risks involved
Your chosen deferred period and policy term
Self-employed people might pay more for income protection pay, but they also benefit more from it.
Some insurance policies offer tax-free benefits. It's worth speaking to a financial adviser to understand how this works.
Here's what to do:
Compare providers and what they offer
Think about your family's needs and your financial protection goals
Review the risk of serious illness, injury, or death
See if you qualify for state benefits
Talk to a financial adviser for guidance
Check if your policy includes terminal illness cover—it can make a big difference for your family in difficult times.
Need life insurance or income protection advice? We can help — free.
James is a self-employed graphic designer. After a car accident, he couldn't work for months. His income protection insurance kicked in after the deferred period, helping him cover his household bills and repayments.
Claire, a teacher with two kids, took out a life insurance policy to help with the mortgage if something happened to her. It gave her family peace of mind knowing her life cover would take care of them.
Health insurance helps you pay for medical care if you become ill or need treatment. It can cover things like GP visits, scans, surgery, and hospital stays. While the NHS offers free care, some people want faster access or more choice—this is where private health insurance comes in.
You pay a monthly premium, and if you need care, your policy helps cover the cost. Some plans also offer support for mental health, physiotherapy, or even dental care.
Whether you're managing existing health conditions or want quicker access to specialists, health insurance gives you more control over your care.
Always check what's included and ask a health insurance broker if you're unsure what plan is right for you.
Payment protection insurance (PPI) is a type of cover that helps you pay off loans, credit cards, or other debts if you can't work due to illness, an accident, or job loss. It usually offers short-term help, often for up to 12 months.
Unlike income protection insurance, which gives you a monthly income, PPI is tied to specific debts. It only covers the amount you owe.
If you're thinking about PPI, make sure to read the small print. Some plans have exclusions, and not everyone qualifies. Always compare this with other options like income protection cover to see which suits your needs best.
Yes! They protect against different things and work well together.
Critical illness cover pays a one-time lump sum. Income protection gives a regular income while you recover.
Yes, there are short-term options that pay for a limited time.
Having life insurance or an income protection policy gives you a safety net. Whether it's a way to support your family or stay on top of your outgoings during illness, these policies matter.
Check the insurance company terms, understand the type of cover, and don't forget to ask questions. A good financial adviser can help you decide what's best.
Being ready today means protecting your future—and your family's too.
We offer clear and simple information to help you choose the right health insurance. As independent health insurance brokers, we explain how different plans work and what they cost, so you can find the right cover for your needs.
While we focus on health cover, we also work with trusted advisers who specialise in life insurance, income protection, and other types of protection. If you need help with these, just let us know.
The goal of this site is to help you understand what policies include, what to watch out for, and how to avoid paying more than you need to. Whether you're looking at a new plan or reviewing your current one, we're here to make things easier.
If you have questions or want advice, we're happy to help.
The information on this site is for general guidance only and should not be seen as personal advice. For tailored help or a quote, please contact us.
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Patrick Baxter is the founder of My Health Protected, an FCA-authorised independent health insurance broker based in London. LinkedIn →
