The amount of income protection you are entitled to or would be insured against depends on several factors, including your provable income before any claim, and limits the cover based on any entitlement to state benefits. Typically, you can protect up to 65% of your income, and the income you’ll receive would be tax-free.

Not everyone will be looking to protect the maximum allowed, so might consider instead insuring against ‘critical monthly expenditure’, which covers essential monthly payments, e.g. rent/mortgage, loan or lease, payments, and food, utility and general living expenses.

With most policies, you can select a deferment (or waiting) period, from the time you become ill to when the policy starts to pay out. Typically this is one, three, or six months, but it can be longer depending on your personal circumstances and preference.

The longer the deferment period, the lower the monthly premium cost, as this creates a lower claims risk to the insurer. It can also impact being offered higher levels of cover for the same premium.

When calculating the level of cover you might need, it’s important to consider (where applicable) any sick pay benefit your employer may provide.

You should always check the terms and conditions of any insurance policy very carefully before you sign to make sure it meets all your needs.

Make sure you know exactly what you can claim for, when you can claim, and how much you're likely to get. This is key to avoid paying a premium for a level of cover you wouldn’t qualify for in the event of a claim.

Income protection does not cover every type of illness, and exclusion can be applied based on a pre-existing medical condition or family medical history, your occupation type, or if you partake in any hazardous sports or hobbies.

You also need to know if you’ll be covered to do other kinds of work if you stop being able to do your current job.

Owner Occupation Cover - in the event of a claim the insurer will pay out regardless of what alternative work or occupation types you may be able to do outside of your own occupation, and is therefore considered to be the most comprehensive form of Income Protection cover.

Suited Occupation Cover - in the event of a claim the insurer will consider if you are able to work in another alternative job / occupational type, based on your qualification and experience.

Cover based on any occupation or work/life tasks - This type of income protection is the least attractive in terms of the requirements for a valid claim, which are based on high levels of incapacity, to the extent that you wouldn’t be considered able to carry out any job requirement or role, or a set number of living tasks.

Full details of you and your family’s medical history. If you have a pre-existing medical condition, look for an insurer who will cover against this. Also, if you take part in any dangerous hobbies, or have a lifestyle that includes smoking, heavy drinking, or drug taking. If you don't tell your insurer about something which later affects your claim, they may refuse to pay out.

If you are already in ill health, or have a dangerous job, you may not be able to get income protection insurance, or you may have to pay higher premiums.

You don’t have to discuss personal or sensitive information with the advisor who is arranging your policy. You can ask to send the information directly to the insurer’s medical officer.