Income Protection and Redundancy Insurance: Different Risks

Income protection for illness or injury is different from cover for involuntary redundancy. The claim trigger, exclusions, payment duration and eligibility need checking separately.

What the policy is designed to pay

Redundancy cover, where available, can exclude known or impending unemployment, voluntary redundancy and certain employment arrangements. Do not assume it can be taken out after a job loss is expected or that a long-term income-protection policy includes it.

Check the incapacity definition

Own-occupation, suited-occupation and other definitions are not interchangeable. The work duties, medical evidence and earnings requirements can affect the claim. A medical diagnosis alone does not establish entitlement to the full benefit.

What Statutory Sick Pay provides

For 2026/27, eligible employees can receive the lower of £123.25 a week or 80% of average weekly earnings, for up to 28 weeks. Rules changed from April 2026, including payment from the first full qualifying day of sickness. Employer contractual sick pay can be different; check your entitlement and current GOV.UK guidance.

How much income can be insured?

Insurers set benefit limits using their earnings definitions and other income or benefits. Turnover, salary, dividends and net profit are not interchangeable. Employees, directors and the self-employed may need different evidence, so obtain an individual assessment.

Compare benefits and exclusions

Keep monthly benefit, deferred period, claim duration and end age consistent. Check premium basis, exclusions, escalation, rehabilitation support and what happens if earnings change. An initial quote is not a guarantee of acceptance or a future claim.

Further reading

Read our income protection comparison guide, how income protection claims work and the difference from critical illness cover.

Compare your options

Speak to our advice team about the protection discussed here. Initial quotations are subject to the insurer assessing the application. Cover begins only when the insurer confirms the policy is in force; completing a form or receiving a quote does not start cover.

Updated October 2026. General information, not a personal recommendation or a quotation. Eligibility, exclusions, premiums and tax treatment depend on the policy and individual circumstances. Discount Life Cover is a trading style of My Key Finance Ltd, authorised and regulated by the FCA, FRN 628996.

Further information: MoneyHelper: income protection; GOV.UK: SSP.