How much does income protection cost?

Realistic ranges

There’s no single answer, so here are some honest ballparks. A healthy non-smoking 30-year-old in an office job, insuring £1,500 a month with a 13-week wait to age 65, might pay £15 to £30 a month. A 45-year-old in a manual trade wanting the same cover with a 4-week wait could pay £60 to £120 a month or more.

These are illustrations, not quotes. The only way to know your price is to get real quotes from several insurers, which is exactly what a broker does.

What insurers look at

Age is the biggest factor: the older you are, the higher the premium, and it’s usually locked in when you take out the policy. Then your occupation. Insurers group jobs into classes based on how physically demanding and how risky they are. A solicitor and a scaffolder wanting identical cover will pay very different amounts.

Health comes next. Existing conditions might be excluded or priced in. Smoking typically adds 30% to 50% to the premium. Finally, the amount of cover, the deferred period, and how long the policy runs, whether to a fixed age or for a shorter term.

Three ways to lower the price

Lengthen the deferred period. If you can survive on sick pay or savings for 13 or 26 weeks, say so. Insure what you need, not your whole salary: work out the minimum that covers your essential outgoings. And consider a shorter payment period. Some policies pay for a maximum of one or two years per claim rather than until retirement. They’re much cheaper, and for many people they’re enough.

Guaranteed vs reviewable premiums

Guaranteed premiums stay fixed for the life of the policy. Reviewable premiums start lower but the insurer can raise them, usually every five years. Over a long policy, guaranteed premiums often work out cheaper. A broker will show you both.