Income Protection · Comparison 2026

Mortgage payment protection vs income protection (UK 2026)

Both can help you keep paying the mortgage if your income stops — but they are built differently. Mortgage payment protection insurance (MPPI) pays a fixed monthly amount tied to your mortgage, usually for a year or two, and can include redundancy cover. Income protection replaces a slice of your earnings for as long as illness or injury keeps you off work. This guide compares what each covers, how long it pays, what it costs and when one fits better than the other.

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Quick answer

The short version

MPPI (mortgage payment protection insurance) pays a set monthly sum aimed at your mortgage if accident, sickness or — on most policies — unemployment stops your income, typically for up to 12–24 months per claim.
Income protection pays a regular monthly income if illness or injury stops you working, and full-term cover can keep paying until you recover, retire or the term ends — well beyond MPPI’s cap.
Redundancy is the key split: most MPPI includes unemployment cover; standard income protection does not pay for redundancy, only for incapacity.
Amount: MPPI is capped near your mortgage cost; income protection is based on your earnings, so it can cover more than just the mortgage.

Side by side

MPPI vs income protection at a glance

	Mortgage payment protection (MPPI)	Income protection
What triggers a payout	Accident, sickness and, on most policies, involuntary unemployment (redundancy) — often sold as “ASU” cover	Any illness or injury that stops you working — incapacity only; redundancy is not covered
What it pays	A fixed monthly amount you set to cover the mortgage (and sometimes associated bills), not linked to your salary	A regular monthly income, typically replacing around 50–65% of gross earnings, paid tax-free
How long it pays	A capped period per claim — commonly up to 12 months, sometimes up to 24	Short-term cover caps each claim at one or two years; full-term can run until recovery, retirement or the end of the term
Medical underwriting	Often little or no medical assessment up front, with exclusions applied at claim — read what is and isn’t covered	Usually medically underwritten when you apply, so you know in advance what is covered
Typical cost	Priced on the monthly benefit and cover type; adding unemployment cover raises the premium	Priced as a percentage of the monthly benefit; for most healthy applicants a low single-digit percentage of the income insured

Indicative comparison for orientation only — not a quote. Cover terms, waiting periods, exclusions and pricing are set by each insurer’s policy and underwriting. Sources: consumer guidance from Which?, Unbiased and UK protection insurers, 2026.

How they differ

A fixed mortgage sum vs a share of your income

The clearest way to tell them apart is to ask what is being insured. MPPI insures a bill — your monthly mortgage payment. You choose a benefit designed to cover that payment (and sometimes a little extra for associated costs), and it pays out if accident, sickness or, on most policies, involuntary redundancy stops your income. Because it is built around a single outgoing, the benefit is capped near your mortgage cost and each claim usually runs for a limited window — commonly up to 12 months, sometimes up to 24.

Income protection insures your earnings instead. It pays a monthly benefit — typically around half to two-thirds of your gross salary — while illness or injury keeps you from working, and payments begin after a chosen deferred period. Crucially, full-term policies can keep paying until you recover, retire or the term ends, rather than stopping after a year or two. Because it is tied to income rather than to one bill, the money can cover the mortgage and the rest of your household costs. The income protection hub explains deferred periods and short-term versus full-term cover in more detail.

The redundancy question

Only one of them covers losing your job

The single biggest practical difference is unemployment. Most MPPI is sold as accident, sickness and unemployment cover, so it can pay out if you are made redundant — subject to the policy conditions, a waiting period and the usual exclusions for redundancy you already knew about. Standard income protection does not cover redundancy at all; it responds only to incapacity from illness or injury. If protecting against job loss is your main concern, that points towards MPPI (or a standalone unemployment policy); if protecting against long-term ill health is the priority, income protection is the cover built for that.

There is a trade-off in return for that breadth. MPPI often applies exclusions at the point of claim rather than assessing your health up front, and its payout window is short. Income protection is usually medically underwritten when you apply, so you know in advance what is and isn’t covered, and it can pay far longer. Many people weigh the certainty and duration of income protection against MPPI’s redundancy cover before deciding — which is general context, not a recommendation.

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Choosing

Which fits which worry?

Neither cover is universally “better” — they answer different worries. If your priority is keeping the mortgage covered through a spell of unemployment as well as illness, and you want a straightforward policy focused on that one bill, MPPI is designed for it. If your priority is replacing your earnings through any long-term illness or injury — for as long as it lasts, not just a year — income protection does more, and its benefit can stretch beyond the mortgage to the rest of your outgoings.

Some households use both ideas: income protection as the backbone for long-term incapacity, with separate unemployment cover for the redundancy gap it leaves. How much of each is right depends on your job security, sick pay, savings and dependants — general context, not advice. It is also worth seeing how income protection sits alongside a critical illness lump sum and life insurance, since those cover different risks again. Compare the policy terms and your own circumstances before deciding.

Common questions

MPPI vs income protection FAQs

What is the main difference between MPPI and income protection?

MPPI pays a fixed monthly amount aimed at your mortgage if accident, sickness or (on most policies) redundancy stops your income, usually for up to 12–24 months. Income protection pays a share of your earnings if illness or injury stops you working, and full-term cover can keep paying until you recover, retire or the term ends. MPPI is broader on unemployment; income protection is broader and longer on ill health.

Does income protection cover redundancy?

Standard income protection does not cover redundancy — it pays only when illness or injury stops you working. If you want cover for losing your job, that usually means MPPI (which is commonly sold as accident, sickness and unemployment cover) or a separate unemployment policy. Always check the policy wording, because unemployment cover carries its own waiting periods and exclusions.

How long does each one pay out for?

MPPI typically pays for a capped period per claim — commonly up to 12 months, sometimes up to 24. Income protection varies: short-term policies also cap each claim at one or two years, but full-term policies can keep paying until you recover, retire or the term ends. If you might be off work for a long time, that longer payout window is a key reason people look at income protection.

Which is cheaper?

It depends on the cover you choose, your age, health, job and the benefit amount, so there is no single answer. Income protection is often competitively priced for the ill-health cover it provides, while adding unemployment cover to MPPI tends to raise its premium. Rather than assume one is cheaper, compare like-for-like quotes for the cover you actually need.

Can MPPI or income protection pay more than my mortgage?

MPPI is built around your mortgage payment, so the benefit is capped near that cost (sometimes with a little extra for associated bills). Income protection is based on your earnings, so within the insurer’s limits the monthly benefit can be larger than the mortgage alone — helping with other household costs too. The money from income protection is yours to use as you choose, not paid straight to a lender.

Do I have to buy MPPI from my mortgage lender?

No. MPPI is a standalone product you can buy from a range of providers, not only from the lender arranging your mortgage. Cover, exclusions and price vary between insurers, so it is worth comparing rather than accepting the first policy offered. Shopping around applies to income protection too.

Can I hold both MPPI and income protection?

You can. Because income protection does not cover redundancy and MPPI’s ill-health payout is short, some households use income protection for long-term incapacity and keep separate unemployment cover for the job-loss gap. Whether that is worthwhile depends on your job security, sick pay, savings and budget — this is general information, not advice, so compare the terms before deciding.

Are the payouts taxed?

Benefits from personal MPPI and personal income protection policies are normally paid tax-free, because the premiums are paid from your own taxed income. Tax treatment depends on your individual circumstances and can change over time, so treat this as general information rather than advice.

Information only — not financial advice. My Insurance Expert is not an FCA-authorised intermediary and does not arrange or sell policies. Comparisons and figures are indicative for orientation, not quotes, and cover terms, waiting periods and exclusions vary by insurer. Last updated: 2026-07-06

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