Insurance
Income Protection & Critical Illness
Income protection and critical illness cover both help if illness or injury stops you working, but they work very differently — and both are often confused with life insurance, which pays out only on death.
Key information
- Income protection pays a regular replacement income if you cannot work
- Critical illness cover pays a one-off lump sum if you are diagnosed with a defined serious condition
- Neither is the same as life insurance, which pays out when you die
- What you can claim for depends closely on the policy definitions
On this page
Income protection
Income protection insurance pays you a regular, usually tax-free income if you cannot work because of illness or injury. Payments start after a waiting period you choose (the “deferred period”) and continue until you can return to work, the policy ends, or you retire — depending on whether you buy short-term or full-term cover. Accepting a longer deferred period lowers the premium.
Critical illness cover
Critical illness cover pays a single lump sum if you are diagnosed with one of the specific serious conditions the policy lists — commonly certain cancers, heart attack or stroke. It pays out on diagnosis of a defined condition, not simply because you cannot work, and the exact definitions in the policy decide whether a claim succeeds. Two policies covering “the same” illnesses can pay out differently because their definitions differ.
How they differ from life insurance
It helps to be clear how the three products differ. Life insurance pays out when you die, giving money to your dependants. Critical illness cover pays a lump sum while you are alive if you are diagnosed with a listed condition. Income protection replaces part of your earnings for as long as you cannot work. They are sometimes bought together, but they are not interchangeable.
Is it worth considering?
Whether you need any of these, and which, depends on your circumstances — for example whether you have savings, an employer sick-pay scheme, or a partner’s income to fall back on. This is general information, not a personal recommendation; because the value of these products turns on the detail of the policy definitions, many people take regulated protection advice before buying.
Your rights & protection
- Long-term protection insurance such as income protection and critical illness cover is protected at 100% by the Financial Services Compensation Scheme if the insurer fails.
- You must take reasonable care to answer the insurer’s health and lifestyle questions honestly when you apply.
- This page is general information, not regulated advice; for a personal recommendation, speak to an FCA-authorised adviser.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Income protection insurance (opens in a new tab). Accessed 22 Aug 2026.
- MoneyHelper, Critical illness insurance (opens in a new tab). Accessed 22 Aug 2026.
- ABI, Protection insurance (opens in a new tab). Accessed 22 Aug 2026.