How much income protection do I need?
There is no single right number — the cover you need is the monthly income that would keep your household running if you couldn’t work. We walk through the practical method for 2026: the maximum benefit insurers allow, how to size it to your essential outgoings, and how the term and deferred period fit in.
The short version
- Start from the cap: insurers usually let you cover around 50–65% of your gross income, paid tax-free, so that is your upper limit.
- Work bottom-up: add up your essential monthly outgoings (mortgage or rent, bills, food, debts) — that is the income you actually need to replace.
- Subtract existing cover: take off any employer sick pay or state benefits, then insure the gap that is left.
- Then choose term and wait: pick how long cover lasts and a deferred period that matches how long your savings or sick pay would hold out.
Sizing your benefit, step by step
| Step | What to do |
|---|---|
| 1. Find your ceiling | Most insurers cap the benefit at roughly 50–65% of your gross (pre-tax) income. The benefit is normally paid tax-free, which is why it is less than 100%. |
| 2. Add up essentials | Total your must-pay monthly outgoings: mortgage or rent, utilities, council tax, food, insurance, travel and minimum debt repayments. |
| 3. Subtract other cover | Deduct any employer sick pay (and how long it lasts) and relevant state benefits. What remains is the shortfall to insure. |
| 4. Set benefit, term & wait | Choose a monthly benefit up to your ceiling that covers the shortfall, a term (e.g. to retirement), and a deferred period that matches your savings buffer. |
Indicative method for orientation only — not a quote or a recommendation. The 50–65% range and the benefit you qualify for are set by each insurer’s underwriting.
An illustrative example (for illustration only)
Suppose someone earns £36,000 gross a year (£3,000 a month). A 60% ceiling means they could insure up to about £1,800 a month. Their essential outgoings come to roughly £1,600 a month. Their employer pays full sick pay for 13 weeks, so they choose a 13-week deferred period and a benefit of around £1,600 a month to retirement age. These are round, made-up figures to show the method — not a quote and not advice.
Why you can’t insure 100% of your income
Income protection insures a monthly benefit rather than a lump sum, and insurers deliberately cap it below your full earnings — commonly around 50–65% of gross income. Because the benefit is normally paid tax-free, that capped figure often lands close to your usual take-home pay, while still leaving a financial incentive to return to work. If you ask for more than the cap allows, the insurer will simply scale the benefit back, so it is worth sizing your cover within that range from the start. For how this sits alongside other protection, see the income protection hub and the wider life insurance section.
Base the benefit on what you actually spend
The cap is your ceiling, not your target. A more useful figure is your essential monthly outgoings — the payments that must continue even if your income stops. List your mortgage or rent, utilities, council tax, food, existing insurance, travel and the minimum on any debts. Insuring that shortfall, rather than your full salary, keeps the premium proportionate while still protecting the things that matter most.
Then subtract cover you already have. Many employers pay sick pay for a set period, and some state benefits may apply — though these are rarely enough on their own. Whatever gap remains is the income protection benefit to aim for. A life insurance policy covers death, not illness, so the two protect different risks and are often held together.
Choosing how long cover lasts and when it starts
Two more choices shape your cover. The term is how long the policy runs — often to your planned retirement age — while the deferred period is the wait between being unable to work and payments beginning, typically 4, 13, 26 or 52 weeks. Match the deferred period to how long your savings or employer sick pay would realistically last: a longer wait lowers the premium but leaves a longer gap you must self-fund. Deciding the benefit amount, term and deferred period together is what turns ‘how much do I need’ into a concrete figure. The income protection hub explains each option in more detail.
How much income protection do I need? FAQs
Information only — not financial advice. My Insurance Expert is not an FCA-authorised intermediary and does not arrange or sell policies. The 50–65% range and the worked example use round, indicative figures for orientation, not quotes. Last updated: 2026-06-13