Most homeowners arrange life insurance to protect their mortgage. Far fewer arrange protection for the more likely scenario: being unable to work due to illness or injury. Yet long-term sickness is a greater statistical risk than death during working years.\n\nIncome Protection — Pays a monthly income (typically 50% to 70% of your gross salary) if you cannot work due to illness or injury. Payments continue until you return to work, reach retirement age, or the policy ends. There is a waiting period (deferred period) before payments start, usually 4, 8, 13, or 26 weeks. Longer waiting periods mean lower premiums. If your employer offers sick pay for the first 6 months, choose a 26-week deferred period to keep costs down.\n\nCritical Illness Cover — Pays a one-off lump sum if you are diagnosed with a specified critical illness on the insurer's list. Common covered conditions include cancer, heart attack, stroke, multiple sclerosis, and organ failure. The money is yours to use however you wish — clear the mortgage, fund treatment, or supplement lost income. Unlike income protection, it pays once and the policy ends.\n\nKey Differences — Income protection provides ongoing monthly payments until recovery or retirement. Critical illness pays a single lump sum on diagnosis of a listed condition. Income protection covers any illness or injury that prevents you from working. Critical illness only covers conditions on the specific list. Income protection is generally considered the more comprehensive product. Critical illness provides a larger immediate sum that can clear a mortgage outright.\n\nWhich Should You Choose — Income protection is better for ongoing financial security and covering all illness types. It ensures your mortgage, bills, and living costs are met every month until you recover. Critical illness is better if you want the option to clear your mortgage immediately upon diagnosis of a serious illness, removing financial pressure entirely. Many advisers recommend income protection as the priority, with critical illness as an additional layer if budget allows.\n\nCost Comparison — A 35-year-old non-smoker earning 40,000 per year might pay roughly 25 to 40 pounds per month for income protection covering 60% of salary until age 65 with a 4-week deferred period. Critical illness cover for 250,000 over 25 years for the same person costs approximately 40 to 60 per month. Combined products are available at a modest discount.\n\nMPPI as an Alternative — Mortgage Payment Protection Insurance covers your monthly mortgage payment specifically (not your wider income) for a limited period (usually 12 to 24 months). It is cheaper than income protection but far more limited. Suitable as a short-term safety net but not a substitute for comprehensive income protection.\n\nEmployer Benefits — Check what your employer provides. Many offer group income protection (often 50% to 75% of salary for up to 5 years). If your employer covers the basics, you may only need a top-up policy. Some employers offer group critical illness or death-in-service benefits worth 2 to 4 times salary. These reduce but rarely eliminate the need for personal cover.\n\nTax Treatment — Income protection premiums paid personally are not tax-deductible, but benefits are received tax-free. If your employer pays the premiums, the benefits are taxed as income. Critical illness payouts are always tax-free regardless of who pays the premiums.