Protecting the income the mortgage stands on
A monthly amount if accident or illness stops you working. The most likely claim during a mortgage term, and the cover most people skip.
Every mortgage is really secured on the same thing: your ability to keep earning. Income protection replaces part of your income if you cannot work because of accident or illness, month after month, until you are back at work or the policy's limit is reached.
Unlike critical illness cover, it is not tied to a list of named conditions. A back problem, an operation with a slow recovery, a long illness that never makes anyone's dramatic list: if it stops you doing your job, this is the policy that responds.
What actually happens when you are signed off
- The first weeks
Employer sick pay, if you have it
Some employers pay full salary for months. Plenty pay statutory sick pay from the first week. The starting point is finding out which yours is, in writing, rather than assuming.
- A few months in
Statutory sick pay
A fixed weekly amount that does not resemble a mortgage payment, and it runs out after a set period. This is the stage where most households start spending savings.
- When that ends
Nothing
From here it is savings and means-tested benefits, with the mortgage still due on the same day every month. This is the cliff the policy exists for.
- Where the policy starts
The deferred period
Cover is set up to start paying when your sick pay stops. The longer you can wait before it begins, the cheaper it is, which is why matching the deferred period to your actual sick pay is most of the design.
What shapes the policy
- How much it pays
- A proportion of your earnings, paid monthly, and normally free of tax. Sized to hold the essentials, with the mortgage first among them.
- How long it pays for
- Full-term cover pays until you can work again, or until the policy ends, even if that is years away. Budget versions pay each claim for a fixed period and cost less. Both are legitimate products; they are just different ones.
- If you are self-employed
- No employer means no sick pay at all, so the deferred period is short and the cover works hardest. For sole traders and company directors this is often the first policy worth arranging, not the last.
- It belongs to you
- The policy is yours rather than your employer's, so changing jobs does not restart anything or take the cover away.
The objections we hear most
Would state benefits not cover me?
Statutory sick pay is a fixed weekly amount for a limited period, and what follows it is means-tested. Neither is designed to hold a mortgage. This cover exists because of that gap, not in ignorance of it.
What about redundancy?
Income protection covers accident and illness, not losing your job. Cover for unemployment exists as a separate, shorter-term product. We would rather tell you plainly what this policy does and does not do than sell it as something it is not.
I am not sure I can afford another policy.
The honest lever is the deferred period: lengthening it brings the price down considerably, and cover that starts when your sick pay genuinely runs out beats fuller cover that gets cancelled in six months. We build it around the budget you actually have.
Let's find out where you stand.
One conversation, no cost, and no obligation to go any further. We will tell you honestly what is possible before you commit to anything.