Comparison · Insurance · 2026
Income Protection vs Critical Illness Cover UK 2026
Income protection insurance replaces a portion of your income if you cannot work due to illness or injury, paying out regularly for as long as you remain unable to work. Critical illness cover pays a single tax-free lump sum on diagnosis of a specified serious illness. They cover different risks and are often used together rather than as alternatives.
TL;DR -- 30-Second Summary
- • Income protection: pays a regular income (usually 50-70% of earnings) for as long as you cannot work, up to a set age
- • Critical illness cover: pays one tax-free lump sum on diagnosis of a listed serious condition, then usually ends
- • Statutory Sick Pay is only GBP 123.25 a week in 2026/27, far below most people’s actual living costs
- • Income protection covers a much wider range of causes of incapacity, not just a fixed list of illnesses
- • Many people hold both: critical illness for a lump sum shock, income protection for ongoing income loss
Side-by-Side Comparison
| Feature | Income Protection Insurance | Critical Illness Cover |
|---|---|---|
| Payout type | Regular income while unable to work | One-off tax-free lump sum |
| Trigger | Any illness/injury preventing you working (per policy definition) | Diagnosis of a listed condition only |
| Duration of payout | Until you can work again or policy ends | Single payment, cover often then ends |
| Typical benefit level | 50-70% of gross income | Fixed sum assured chosen at outset |
| Best for | Replacing lost income long-term | A cash lump sum for treatment, debt clearance or lifestyle changes |
| Interaction with SSP | Tops up or replaces SSP/employer sick pay | Independent lump sum, unrelated to sick pay |
The Gap Statutory Sick Pay Leaves
Statutory Sick Pay is GBP 123.25 a week for 2026/27, payable for up to 28 weeks, which for most people covers only a small fraction of their normal outgoings. Some employers offer more generous contractual sick pay, but this is often time-limited too, typically full pay for a period followed by reduced or no pay.
Income protection insurance is designed to fill this gap, paying a regular income, often 50-70% of your normal gross earnings, for as long as you remain unable to work due to illness or injury, up to your chosen retirement age in the most comprehensive policies, or for a shorter maximum benefit period on cheaper plans.
Why Critical Illness Serves a Different Purpose
Critical illness cover pays a single tax-free lump sum if you are diagnosed with one of a defined list of serious conditions, such as certain cancers, heart attack or stroke meeting the policy’s specific definition. It is not designed to replace ongoing income; instead it provides a cash sum that can clear a mortgage, fund private treatment, adapt your home, or simply give breathing space during recovery.
Because critical illness cover only pays out for listed conditions meeting precise definitions, it will not help if you are unable to work due to a condition not on the list, or a milder version of a listed condition that does not meet the severity threshold, which is where income protection’s broader "unable to work" trigger becomes valuable as a complement.