What you already have
Employer benefits and state support cover more than people think — and less than they hope.
Before buying any protection, find out what you're already entitled to. People routinely buy cover that duplicates an employer benefit, and just as routinely assume they're covered for things they aren't.
From your employer
Sick pay. The single most important number, and the one most people can't answer.
Contractual sick pay varies enormously. Some employers pay nothing beyond the statutory minimum. Others — particularly larger organisations and the public sector — pay full salary for a period, then half.
NHS staff, for example, build entitlement with service, reaching several months at full pay and several more at half pay after a number of years. Teachers, local government and civil service schemes have their own scales. In the North East, where public sector employment runs above the national average, a lot of people have far better sick pay than they realise — and it changes the protection they need, because a long deferred period on an income protection policy is much cheaper.
The flip side: people in smaller private employers often have nothing beyond statutory, and the gap opens after a fortnight.
Find out yours. It's in your contract or staff handbook, and HR can tell you in one email. Ask: how long at full pay, how long at half pay, and does it depend on length of service.
Death in service. Common in larger employers, usually two to four times salary, paid to your family if you die while employed.
Three caveats. It's tied to the job — leave, and it goes. It's usually not enough on its own if you have a mortgage and children. And it may count towards pension death benefit limits, which matters for large pensions.
Group income protection. Less common, more valuable. Some employers insure a proportion of your salary if you're off long-term. Worth knowing whether you have it, what proportion it pays, when it starts, and how long it runs.
Group critical illness, occasionally offered, sometimes as a flexible benefit you opt into.
Employee assistance programmes, private medical cover, and virtual GP services — not protection as such, but often unused because nobody knew they existed.
From the state
The safety net exists. It's just much lower than most people assume.
Statutory sick pay is paid by your employer for a limited period — currently up to 28 weeks — at a flat weekly rate that's a small fraction of most people's earnings. It's a floor, not a replacement.
Employment and Support Allowance may be available after that for people with limited capability for work, subject to an assessment. Rates are modest.
Universal Credit is means-tested, taking into account savings and a partner's income. Someone with a working partner or meaningful savings may get little or nothing.
Bereavement Support Payment is available to a surviving spouse or civil partner with a limited initial lump sum and monthly payments for a limited period. Unmarried partners generally don't qualify, however long they've been together, which is one of the sharper injustices in the system and a real reason for unmarried couples to insure privately.
Personal Independence Payment helps with the extra costs of a long-term condition, and isn't means-tested or dependent on working.
The honest summary: state support keeps people from destitution. It does not maintain a mortgage, a car and a family's standard of living.
What this changes
Once you know your employer sick pay period, income protection becomes much cheaper to buy sensibly. Set the deferred period — the wait before the policy pays — to start when your sick pay ends. Someone with six months at full pay doesn't need a policy paying from week four, and paying for one is wasting money.
Once you know your death in service cover, you can size life cover to fill the actual gap rather than duplicating what you have.
And once you know that your partner wouldn't qualify for Bereavement Support Payment because you're not married, you know something worth acting on.
The action
One email to HR with three questions: what's my sick pay entitlement, what's my death in service cover, and do we have group income protection or critical illness.
Then check your State Pension forecast while you're at it — Your State Pension — since the same NI record drives several of the benefits above.
This article is for general education only and isn't personal advice. State benefit rates and rules change regularly — check gov.uk for current figures.
Related in this topic
If reading this raised a question about your own situation, get in touch.
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