Virtually all Income Protection Insurance policies start paying out once you have been off work for an unbroken period of between one and 180 days. The longer you can do without the payment of benefits, the cheaper the cover. This is called the deferment or excess period.

The better providers enable you to vary this excess period so you can reflect any sickness benefit scheme your employer might have. Typically, your company scheme might pay you in full for 3 months, after which you would want your own policy benefits to start. Equally, if you were made redundant, you might need your payment period to start without delay. So select excess periods to suit your circumstances, especially where you need to vary the excess period between unemployment and accident/sickness cover. You are also likely to save money this way.

Most policies will pay out for a period of 12 or 24 months. Think very carefully if considering anything less than 12 months cover, especially in the current economic climate. By far the majority of providers offer 12 months as standard. Cheaper 6 month and 3 month benefit period policies are available, however you must be very confident you could get back into work within this short period.

You will always be limited to receiving benefits that do not exceed your take home pay. Some policies are more restricted than others. Many only offer up to £1000 per month. Several more are restricted to 50% of your gross salary. However, there are policies that offer 60% or more of gross earnings and a higher maximum monthly benefit. Both are better matched to modern needs and give you more scope should you need to increase your benefits in the future. Claim payments are not subject to tax or national insurance.