What affects income protection cost?
- Age — older applicants pay more
- Occupation class — manual workers pay more than office workers
- Health and medical history
- Smoking status
- Monthly benefit amount — higher benefit = higher premium
- Deferred period — longer waits before payout = lower premium
- Short-term vs long-term cover
- Definition type — own occupation costs more than any occupation
Example prices: £1,500/month benefit, own occupation, long-term
Age 25, office worker, non-smoker, 13-week deferred: £20–£35/month
Age 30, office worker, non-smoker, 13-week deferred: £25–£42/month
Age 35, office worker, non-smoker, 13-week deferred: £32–£55/month
Age 40, office worker, non-smoker, 13-week deferred: £45–£75/month
Age 35, manual worker, non-smoker, 13-week deferred: £55–£95/month
How the deferred period affects cost
Choosing a longer deferred period is one of the most effective ways to reduce income protection premiums:
- 4-week deferred period — most expensive
- 13-week deferred period — moderate cost, popular choice
- 26-week deferred period — significantly cheaper
- 52-week deferred period — cheapest option
Match your deferred period to how long you could survive on savings or employer sick pay.
Short-term vs long-term cost
Short-term IP (paying for up to 1–2 years) costs significantly less than long-term IP (paying to retirement). If budget is tight, a short-term policy provides some protection while keeping premiums manageable.
Tips to reduce income protection cost
- Extend your deferred period to match your savings
- Choose short-term cover if long-term is unaffordable
- Buy now — premiums increase with age
- Quit smoking
- Compare the whole market — a 30–50% price variation exists between insurers
Frequently Asked Questions
It doesn't have to be. A 30-year-old office worker can get £1,500/month of long-term IP for £25–£40/month. Short-term policies or longer deferred periods can reduce this further.
Manual workers are statistically more likely to suffer injuries or musculoskeletal conditions that prevent them from doing their physical job. Insurers reflect this higher risk in premiums.