Protection for your income

Income protection. Those two little words might not mean much to you now, but they’re about to. We’re here to help you understand, so let’s dive right in.

Two women in bathing suits walking back from the sea on teh beac
The financial bit

Basically, it’s insurance that gives you money every month if you can’t work because you’re ill or injured. Think of it as replacing your payday. We’ll have your back and take care of you until you can get going again. Employed, self-employed, butcher, baker, candlestick maker…it doesn’t matter to us. You decide how long you need to be paid for (your term) and how soon you want the money to hit your account after you stop working (your deferred period). Both of those things play a part in how much your insurance costs.

A young woman of colour excercising at the gym with her male friend/personal trainer
The looking after you bit

It’s not just about giving you monthly pay outs (even though we know that’s important). It’s about looking after your health, keeping you fighting fit and making sure you’re feeling your best. Which is why our income protection policy comes with wellbeing and rehabilitation support to help get you back to work.

Should I get it?

We understand it might not be the most exciting thing in the world to think about. Yes, most of us would probably rather be debating whether pineapple does really belong on a pizza. But let’s be real for a minute – can you afford not to think about it? We’re talking about keeping a roof over your head, stocking up your fridge and keeping the lights on here.

Have a read of some of the common thoughts that people like you think when it comes to income protection insurance. We’ve come up with a few answers – see if it helps you reach a decision.

Don’t you? Income is the thing that keeps us ticking over, making sure essential outgoings are taken care of. And if you’re lucky it lets us do what we enjoy, whether that’s trips to the cinema, dinner with a friend or a treat for the kids. If you didn’t have a payday for a few months, have a quick think about how you would keep paying for life’s little luxuries on top of day-to-day expenses.

There are some topics in life we all like to stick our heads in the sand about. And thinking about the worst case scenario with our health is definitely one of them. But here’s the thing – life happens and really, it’s better if you’re prepared for it. Most claims on our income protection were for things like back pain, tendonitis, and herniated discs1 – they’re one of the main reasons people are in pain and taking time off work2.

We hear you. The price of everything is going up these days. But actually income protection might not be as pricey as you think. There are different options you can choose, which make it cheaper or more expensive – it’s up to you. Sit down and have a chat with a financial adviser to see what might work for your budget. If you do end up needing it, it could be the best money you’ve ever spent.

It’s time for some tough love from us. Almost a quarter of us have no savings and 50% of us have £1,000 or less in savings3. How would you survive with no money coming in? Plus, wouldn’t you rather use those savings on a nice holiday? Also, the maths doesn’t add up when you look at a household’s average weekly outgoings (£6284) against what statutory sick pay gives you (£109.405).

Ok there, we said it. So let’s make sure you’re taken care of before you ever get to that point. Have a chat with an adviser about whether income protection’s the insurance for you.

This is a definite myth to bust. In 2022, our industry (that’s life insurance in the UK) paid out record-breaking amounts of money – we’re talking in the billions. With 98% of claims being paid6. Occasionally insurers can’t pay out. The main reason is because we sometimes don’t get the full story when people set up their insurance6. So if we have all the details at the start, there’s no reason your claims won’t be paid, helping you get back to your best.

To put it simply the two kinds of policies apply to very different situations and cover different illnesses. The pay outs are also designed to do different things. In a nutshell, critical illness gives you a single lump sum of money if you’re diagnosed, or have surgery for, a specified potentially life-threatening illness.

Income protection gives you a percentage of your salary as a regular payment if you can’t work due to illness or injury. Income protection covers most medical conditions. Unlike critical illness there is no ‘list’ of insured illnesses and so it tends not to matter what the illness or condition is. The important factor is simply whether or not you can work.

There may be some cross over where the same condition could lead to a successful claim on both policies. Another way to look at it is one looks after those big one off expenses or debts and one tackles the monthly bills that never go away while you’re off work and recovering.

Three reasons why AIG

We like to think our income protection is pretty good – and here are three reasons why.

Young man of east asian descent smiling whilst in a canoe on the water

Financial Protection – the money bit

We’ve made the money side of things as easy to understand as possible. If you need to take time off work, for illness or injury, you’ll get up to 60% of the first £60,000 of your salary, plus 50% of any pay after that7. And what’s more, the payments are tax free. Yes you read that right.

We’ve also got a thing called proportionate payment. What that means is we’ll top-up your income if you’re earning less when you go back to work – normally it’s for things like working reduced hours or in a lower paid role.

But it’s not just about giving you monthly pay outs – it’s also about keeping you happy, healthy and at your best.

From the moment you take out your cover, you have access to health, wellbeing and support services. Use them from the get-go, as many times as you want.

Shows six Smart Health services as icons including: online GP, second medical opinion, Mental health support, Health check, Nutrition advice and Fitness plans

Smart Health – the prevention bit

As the saying goes, prevention is better than cure. So we want to make sure you’ve got what you need to look after yourself. That’s where Smart Health comes in – it’s our very own (award-winning) health and wellbeing offering.

It’s got the perfect blend of services – everything from a 24/7 online GP to nutrition advice. Access includes your partner and children up to age 21.

Available 24/7, 365 days a year – use it as many times as you like. Oh and you can use it via the web and on our app. View the full details of what’s included.


Smart Health is provided to AIG Life Limited customers by Teladoc Health. We want to let you know that these services are non-contractual, which means they don’t form part of the insurance contract with us. If our partnership with Teladoc Health ends, these services could be changed or withdrawn in the future.

*Smart Health is available to insured employees of Group Life and Group Critical Illness clients. And to all employees of Group Income Protection clients. 

A young woman at the gym with her friend

Rehabilitation – the support bit

In other words, getting you better and back to work if you’ve needed time off. Being off poorly and then returning to work can be hard, so you’ll have support from us every step of the way (before you even claim).

Whether it’s counselling or physiotherapy to get you back to the office, we’ll do our best to get you what’s going to help.

For even more detail, take a look at our helpful guide.


Young woman looking at her laptop, holding a pen.

How do I get it?

It’s important that you select the right options when setting up your income protection cover, so you’ll need to have a chat with a financial adviser.

If you’ve already got your own adviser, that’s great. But if you’re looking for some recommendations of who to speak to, check out one of the 'get advice' options on our ‘How to Buy’ page. They’ll make sure whatever insurance you take out is right for you, even if it’s not ours.

How to buy

Reviewable exclusions

Find out more about reviewable exclusions on your income protection policy.


1 AIG Life 2022 claims statistics, published in June 2023, Musculoskeletal conditions profile: short profile commentary, May 2022, last viewed June 2023, Savings statistics: Average savings in the UK, June 2023, Average UK household budget, June 2023, Statutory Sick Pay, June 2023, Protection insurers pay out £6.85 billion to support individuals and families, June 2023
7When you claim, how much you’ll be paid is based on your pre-tax annual income before you become too ill to work, not the income you had at the start of your cover.