Your income is your most important asset — whether you’re employed, freelance, self-employed or running your own business. If illness or injury prevents you from working, the financial impact can be severe: mortgage payments, bills, household costs and business expenses all continue.
At Fraser Bond, we advise professionals and business owners in London and across the UK on how income protection insurance can form a key pillar of their financial-risk management. We explain what cover is available, how it works, what to look out for and how it aligns with your personal and business circumstances.
Income protection insurance is a long-term insurance policy that pays out a regular income if you are unable to work due to illness or injury.Unlike life insurance (which pays a lump sum if you die) or critical illness cover (which usually pays if you’re diagnosed with a specified illness), income protection is designed to replace part of your income while you recover or until you return to work.
Key features:
The cover typically pays between about 50%-70% of your earnings, though the exact % depends on the policy.
There is normally a waiting or “deferred” period (for example 4–52 weeks) from when you’re unable to work until the payments begin.
The benefit period can vary: some policies pay until you return to work, reach retirement age, or for a defined period (e.g., 1-5 years) depending on the cover.
Claims are only valid when the inability to work is caused by illness or injury — redundancy or voluntary unemployment is typically not covered.
In the London and UK context, income protection becomes particularly relevant for several reasons:
If you live in London, your cost base (housing, commute, business costs) tends to be higher → losing your income quickly puts pressure on your financial stability.
If you’re self-employed, freelance or a contractor (common in London’s economy), you may have limited or no employer sick pay and fewer benefits. Income protection fills that gap.
Many professionals have mortgages, business loans or commitments that cannot easily be paused. Income protection helps ensure you can meet those obligations if you cannot work.
If you manage or advise across multiple roles (for example in property, consultancy, creative services) you effectively risk multiple income streams — the insurance helps limit risk of income cessation.
Having a solid income-protection policy also supports your professional credibility and financial planning, especially when working with lenders, clients or business partners.
Here are some of the benchmarks, cost-drivers and policy-features you should review:
Many UK policies cover 50%–65% of your pre-tax earnings.
You may be able to select a shorter benefit period (e.g., 1-5 years) or a longer one (to retirement). Longer cover = higher premium.
Choosing a longer deferred period (the time you wait before payouts start) reduces your premium.
Premiums and eligibility are influenced by:
Your age — younger applicants typically pay lower premiums.
Your health and medical history — pre-existing conditions may be excluded or rated.
Your occupation and job risk — high-risk jobs or roles involving manual/physical work usually cost more.
The waiting/deferred period you choose — e.g., one that pays after 4 weeks vs 12 months.
The benefit period — how long payments last. Longer benefit = higher cost.
Whether you are employed or self-employed — self-employed may have fewer safety nets so the cover may be more valuable.
Are pre-existing conditions excluded (i.e., any known medical issues before the policy start) ?
Does the policy define incapacity in terms of your own occupation (your specific job) or any occupation you are suited to? The own-occupation definition is more expensive but offers stronger protection.
Is your income basis clear — how your benefit is calculated (e.g., gross earnings, net earnings, business profits if self-employed) ?
What is the interaction with state benefits or employer sick pay — does the policy reduce payments if you get statutory sick pay or employer cover?]
Are you covered for mental health conditions, pregnancy complications, etc.? Some policies may have exclusions.
Will the insurance remain valid if you change your job or move into a different role? Does the policy cover part-time working or reduced earnings?
Fraser Bond recommends the following structured approach:
Assess your income risk profile – What income do you rely on, what would you struggle to cover if you couldn’t work, what commitments would you still pay (mortgage, business costs, household)?
Understand your current safety nets – Do you have employer sick pay, disability benefits, savings, redundancies? If those are limited, income protection becomes more critical.
Decide on your cover needs – Choose what % of income you want covered, how long the waiting period should be, how long you want the benefit to last.
Review policy wording and exclusions – Ensure the definition of incapacity aligns with your job; check for pre-existing conditions, exclusions, and occupation suitability.
Compare providers or use a specialist adviser – Income protection can vary significantly by insurer; getting professional advice may help you get better value and coverage.
Keep proof of cover and regularly review – As your income or job changes, your cover may need to adjust; ensure you remain protected as your circumstances evolve.
Account for tax and business implications – If you’re self-employed or a company director, check tax-treatment of premiums and benefits.
Consider combining with other protection cover – Life insurance, critical illness cover and business overhead cover may complement your income protection.
Fraser Bond is not just a general insurance adviser — our strength lies in aligning financial risk-cover with professional and business contexts, especially for London-based clients and UK professionals. We offer:
Insight into how your occupation, client base, income structure and business context affect your protection needs.
Review of policy documents to ensure definitions match your role, waiting periods are appropriate, and exclusions are understood.
Support in integrating your protection strategy with your broader financial, business-and-personal planning — helping you remain contract-ready, financially secure and resilient.
Ongoing advisory support as your career or business evolves — adjusting protection cover in line with growth, change of role, or income shifts.
If you rely on your income in London or across the UK and want to safeguard it against illness or injury, visit Fraser Bond via FraserBond.com or contact our London advisory team for tailored guidance on income protection insurance, how it fits your professional life, and how to choose the right policy that protects your future.
