Income protection for mortgage repayments how it works, what it costs and what it covers

Income protection for mortgage repayments is a type of insurance that pays you a monthly, tax-free income if illness or injury stops you working, so you have money coming in to put towards your mortgage and other essentials. Most policies pay out somewhere between 50% and 70% of your gross income, and payments continue until you return to work, the policy's benefit period ends, or you reach retirement age.

It's important to understand what income protection does not do from the outset. Standard income protection does not cover redundancy or voluntary job loss - that's a different product, usually called mortgage payment protection insurance (MPPI) or Accident, Sickness and Unemployment (ASU) cover, which we compare in detail further down this guide.

Falling behind on your mortgage payments can put your home at risk. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Income protection is designed to reduce this risk, not eliminate it, and any pay-out depends on the insurer's underwriting and your policy's terms.

If you're weighing up protection alongside a new mortgage application, our income protection insurance guide covers how the product works more broadly, and it's worth checking this alongside our mortgage in principle explained guide if you're part-way through buying.

Income protection is designed to step in after you've chosen a policy and it's already in place, not after you've stopped working. Once you take out cover, you select a waiting period (sometimes called a deferred period) and a benefit period, then the policy sits in the background until you need it.

If illness or injury then stops you working, you make a claim once the waiting period has passed. From that point, you receive a monthly, tax-free income that you can use towards your mortgage payments and other outgoings, for as long as you remain unable to work, up to the benefit period or retirement age set out in your policy.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Income protection is designed to reduce this risk by giving you an income to fall back on if you can't work, but it doesn't remove it altogether, and every claim depends on the insurer's underwriting and policy terms.

If you're already struggling with mortgage payments, MoneyHelper offers free, impartial guidance on mortgage arrears and debt at moneyhelper.org.uk or by calling 0800 138 7777.

"Mortgage protection insurance" and "MPPI" usually refer to a different, shorter-term product: Accident, Sickness and Unemployment (ASU) cover. Unlike standard income protection, MPPI/ASU cover does include limited redundancy cover, typically paying out for 12 to 24 months per claim, alongside cover for illness and injury.

Long-term income protection, by contrast, covers illness and injury only, with no redundancy cover, but for a much longer benefit period, sometimes right through to retirement age. This is the direct answer to "how do I protect my mortgage if I lose my job?": you need MPPI or ASU cover for redundancy, not standard income protection.

Some homeowners take out both: MPPI/ASU cover to bridge the first year or two after redundancy or short-term illness, and long-term income protection to cover the years beyond that if illness or injury keeps them out of work. Others prefer a lump sum instead of a monthly income; if you'd rather your mortgage was cleared outright, it's worth understanding life insurance to pay off your mortgage and how it differs from income-based cover.

If you want to compare income protection against other protection products more broadly before deciding, our guide to types of life insurance explains how life insurance, critical illness cover and income protection fit together.

Income protection typically covers illness and injury that stops you working, including many mental health conditions, subject to the insurer's underwriting at the point you apply.

It typically does not cover voluntary redundancy, resignation, or self-inflicted circumstances, and pre-existing conditions are often excluded or loaded (meaning you pay more for cover that includes them) rather than covered as standard.

If you have a pre-existing musculoskeletal condition such as osteoarthritis, insurers generally assess it individually during underwriting rather than declining you automatically. Depending on the severity and how it affects your occupation, you may be offered cover with an exclusion for that condition, a loading, or in some cases standard terms. It's worth comparing insurers directly, since underwriting stances vary; see our guide to compare the best income protection providers for more on how different insurers approach pre-existing conditions.

Rather than starting from a percentage of your income, it's more useful to start from your actual monthly mortgage payment. Add your essential outgoings, such as utilities, council tax and food, then subtract any sick pay, savings you could draw on, or other household income. What's left is the gap your income protection needs to cover.

If you have an interest-only mortgage, your cover needs to meet the interest payment in full, since there's no capital repayment cushion to fall back on if you fall short. Repayment mortgage holders have slightly more flexibility, but the same principle applies: base your cover level on what you'd genuinely need each month, not a rough percentage.

• Start with your actual monthly mortgage payment
• Add essential household outgoings
• Subtract sick pay entitlement and other income you could rely on
• Check whether your mortgage is interest-only or repayment, and size cover accordingly

We haven't quoted specific premiums here, because they change frequently and depend on your individual circumstances; an advisor can talk you through an accurate, up-to-date cost once they understand your situation. What we can explain are the factors insurers use to work out your premium.

A shorter waiting period generally costs more, because the insurer is taking on risk sooner after a claim starts. Choosing a longer waiting period usually costs less, but only works if you have enough savings or sick pay to bridge the gap until payments begin.

There's no single answer to whether income protection is worth it. It depends on your sick pay entitlement, how much you've got in savings, the size of your mortgage payment relative to your income, and whether you have dependants relying on that income too.

You may sometimes see income protection discussed alongside financial commentators such as Martin Lewis. We won't imply that any named commentator endorses a specific product or provider; for published, dated guidance, MoneyHelper (moneyhelper.org.uk or 0800 138 7777) is a free, impartial, government-backed service that covers protection insurance and mortgage arrears support.

A simple checklist can help you decide:

• Would your employer's sick pay run out before you could manage on savings alone?
• Do you have savings that would cover your mortgage and essentials for more than a few months?
• Is your mortgage payment a large share of your income, leaving little room to absorb a loss of earnings?
• Do you have a partner, children or other dependants who rely on your income?

If you answer yes to most of these, income protection is more likely to be worth considering. If you're also worried about existing debts falling into arrears, Citizens Advice (citizensadvice.org.uk) offers free guidance on managing repayments before problems escalate.

If you're self-employed, you don't have an employer's sick pay to fall back on, and Statutory Sick Pay doesn't apply either. Because income can be irregular, insurers typically base your cover level on your average income over the last two to three years rather than your most recent figure alone.

If you're a company director rather than a sole trader, the way your income is structured, such as a mix of salary and dividends, can affect how much cover an insurer will offer; it's worth looking at executive income protection if this applies to you.

For interest-only mortgages, remember that your cover needs to fully meet the interest payment each month, since there's no capital repayment element acting as a buffer if your income drops. Repayment mortgages give you a small amount of built-in flexibility that interest-only mortgages don't.

Before comparing insurers, it helps to be clear on what you actually need. Use this checklist as a starting point:

1. Match your waiting period to how long your savings or sick pay would realistically last
2. Decide whether you need MPPI/ASU cover for redundancy alongside, or instead of, long-term income protection
3. Check whether the policy uses an "own occupation" or "any occupation" definition of incapacity, since this affects how easily you can claim
4. Read the exclusions list carefully before you buy, especially if you have a pre-existing condition

For more on how to choose a waiting period that matches your savings, read our income protection deferred period explained guide before you compare quotes.

All UK income protection insurers must be authorised by the Financial Conduct Authority; you can check any insurer's authorisation on the Financial Conduct Authority Register.

If you're moving home or remortgaging, most income protection policies aren't automatically affected, but it's worth reviewing your cover alongside any changes to your mortgage; see our moving home mortgage guide for more on the process.