Money Advice Service

Protection insurance can be a valuable safety net for you or your family, should you become ill or die. However, in some cases, you might find you already be covered in some way either as part of your work benefits or through the state.


Workplace benefits

It’s always a good idea to check if your employer provides you with some level of cover.

Find out what workplace benefits you have by looking at your contract or pension documents.

If you’re still not sure, speak to your organisation’s HR department.

You might find that your workplace benefits already include income protection insurance, or entitle you to cheaper rates from suppliers.

There are several types of protection cover and benefits which your employer might offer and we’ve put together a list of the most common.

Private medical insurance

Some organisations provide their employees with private medical insurance.

This means that if you become ill, you will be able to access private medical care.

You will have to pay tax on your private medical insurance premiums, however, company schemes are often significantly cheaper than what’s available on the market and are more likely to include cover for pre-existing conditions.

Life insurance

Your employer might have a death-in-service life insurance policy for employees.

This type of insurance will typically provide a lump sum payment to your beneficiaries, should you die.

Group income protection

This type of policy will pay out a percentage of your salary should you become unable to work due to accident or an illness.

You can get this type of insurance independently, however, it is often cheaper to buy it through your employer.

If something happens to you, the group income protection insurer will pay an arranged sum to your employer who will in turn pay it to you.

It’s worth noting that tax and National Insurance are deducted from group income protection, unlike individual income protection.

Critical illness cover

Critical illness cover pays out a lump sum to employees affected by certain medical conditions.

The conditions which would result in lump sum payment are pre-determined by the insurance provider.

For example, you might find that the policy covers a stroke, but not skin cancer.

Sick pay

Although, you have no legal right to contractual sick pay from your employer, you might find that your work contract includes some cover for when you’re unwell.

The extent of any protection is up to your employer, so it’s worth having a look to find out what you’re entitled to.

This is not the same as Statutory Sick Pay (see below).

State support

Although the state might provide you or your family with some financial support, the amount provided could be much less than you would expect.

In certain circumstances the state will provide you or your family with financial support when something goes wrong.

Common benefits you might receive include:

  • Employment
  • Support Allowance
  • Jobseeker’s Allowance
  • Personal Independence Payment.

Statutory Sick Pay

If you become ill and are unable to work, your employer will provide you with sick pay.

The standard rate for Statutory Sick Pay is £92.05 per week and will be paid out by your employer for up to 28 weeks.

There are a number of criteria which you will need to fulfil to qualify for Statutory Sick Pay, which you can find on the Government’s dedicated guide.

Personal Independence Payment

This benefit provides financial support to cover the costs of long-term ill-health or disability.

Payments range from £22.65 to £145.35 a week and are dependent on how your condition affects you, not the condition itself.

Read our guide for more information on Personal Independence Payments.

Employment and Support Allowance

Employment and Support Allowance provides financial help to those unable to work due to illness or disability.

In order to find out what you’re entitled to, you’ll have to attend a Work Capability Assessment to determine to what extent your illness or disability affects your capacity to work.

You will usually be paid an initial assessment rate while you wait for your Work Capability Assessment.

If you qualify for ESA, payments will depend on how much support you need and range between £73.10 and £109.65. You might be entitled to extra payments if you have severe needs.

Learn more information on Employment and Support Allowance.

Jobseeker’s Allowance

If you lose your job, you can get in touch with your local Jobcentre Plus or Jobs and Benefits Office to find out what benefits you might be entitled to.

More information on Jobseeker’s Allowance.

Universal Credit

Universal Credit is a single monthly payment for people in or out of work.

It replaces some of the benefits and tax credits that you might be getting now.

Find out more in our guide on Universal Credit.

This article is provided by the Money Advice Service.