It’s a common question: “Do I need income protection insurance if I get sick pay from work?” On the surface, employer sick pay may seem sufficient. But how long does it last? And what happens when it runs out? Income protection can help bridge the gap, especially if you’re off work for months, rather than just days.
In this guide, we’ll break down when sick pay might be enough, when it isn’t, and how income protection insurance fits into the bigger picture.
What is income protection insurance?
Income protection insurance is a policy that pays you a monthly benefit if you can’t work due to illness or injury. It’s designed to replace part of your lost income until you’re well enough to return to work or reach retirement age, depending on the policy.
It can be short-term (paying out for 1–2 years) or long-term (paying out until a set age), and it usually kicks in after a deferred period-commonly 4, 8, 13 or 26 weeks after you stop working.
What is sick pay, and how long does it last?
There are two types of sick pay in the UK:
- Paid by your employer for up to 28 weeks
- £116.75 per week (as of 2025)
- Only applies if you earn at least £123/week
- Occupational Sick Pay (company sick pay)
- This is what some employers offer on top of SSP
- It might be full pay for a few weeks or months, then half pay
- Not all employers offer this, and policies vary widely
When is sick pay enough?
In some situations, sick pay may give you enough financial support, especially if:
- Your employer provides generous occupational sick pay
- You only need to take a short amount of time off
- You have a financial safety net or savings
However, it’s often not designed for individuals with long-term illnesses or injuries.
When might you still need income protection?
Even if you get sick pay, income protection insurance could still be a valuable financial back-up. Here’s why:
- Sick pay is temporary – Most employers stop paying after a few months
- SSP is low – £116.75 per week might not cover basic bills
- Income protection can last longer – Many policies pay out for years if needed
- Self-employed? – You won’t get SSP or company sick pay at all
- Your lifestyle doesn’t pause when your income does – Rent, mortgage, food, and bills keep coming
Who might benefit most from income protection?
- Self-employed workers
- Employees with limited or no occupational sick pay
- People with financial dependents
- Homeowners with mortgages or rent
- Anyone without significant savings
If you’d struggle to maintain your lifestyle without your salary, income protection might be worth considering, even if you have some sick pay.
A quick comparison: sick pay vs income protection
FAQs
Is income protection worth it if I already get company sick pay?
It depends on how long your employer supports you. If it’s only a few weeks or months, income protection could cover you if your recovery takes longer.
Do I still need income protection if I have savings?
Savings can help, but they might not last forever. Income protection can help prevent depleting your savings or incurring debt.
Does income protection pay out straight away?
No, it usually has a deferred period. This is why some people match the deferral to their employer’s sick pay, so benefits start when work pay ends.
Can I get income protection if I’m self-employed?
Yes, and it’s one of the most valuable types of protection for freelancers and business owners who don’t get sick pay.
Can I claim both income protection and sick pay simultaneously?
Yes, although some policies will offset the amount paid, depending on what you’re getting from your employer.
Final thoughts
So, do you need income protection insurance if you already get sick pay? It depends on how long your sick pay lasts, your financial responsibilities, and whether you can cope without a regular income.
For many, income protection offers peace of mind. It’s not about duplicating sick pay-it’s about extending support when you need it most.
Need help working out whether it’s right for you? Our specialists are here to help you discuss it.
