What Is a Deferred Period?
The deferred period is the length of time you must be off work before your income protection policy starts paying. Common options are:
| Deferred Period | Monthly Cost (approx) | Best For |
|---|---|---|
| 1 week | Highest | Self-employed, no sick pay |
| 4 weeks | High | Self-employed, short savings |
| 13 weeks (3 months) | Medium | 3 months employer sick pay |
| 26 weeks (6 months) | Lower | 6 months employer sick pay |
| 52 weeks (12 months) | Lowest | Generous sick pay, large savings |
How to Choose
Simple rule: Your deferred period should equal the length of time you can financially survive without your IP policy paying out.
Check your employment contract for sick pay provisions. Then ask:
- How long will my employer pay full salary?
- How long will my employer pay half salary?
- Do I have savings to bridge any remaining gap?
Self-Employed Considerations
If you are self-employed, you may have no sick pay at all. In this case, consider:
- A 4-week deferred period – slightly higher premium but pays out quickly
- A day-one accident cover option if available
The Premium Impact
Moving from a 4-week to a 26-week deferred period can reduce premiums by 30–40%. This saving is worthwhile if your employer provides 6 months sick pay – but it could leave you in financial difficulty if they do not.
Frequently Asked Questions
Waiting period before policy pays. Match to sick pay. Self-employed: 4 weeks or less.
Usually 4 weeks. No sick pay means you need fast payout.