Income Protection: What the Claims Data Actually Shows

Income protection is the policy most people can explain in one sentence — "it replaces your income if you can't work" — and the one most people still don't have. Part of the reason is that it's easy to underestimate how often it's actually used, and for what.

The Numbers Are Larger Than Most Assume

UK insurers paid out a record £209 million in individual income protection claims in 2025, across roughly 258,000 new claims, with an average payout of £19,300 — figures that have risen year over year (Association of British Insurers, 2025). Individual claims were paid at a rate of 97.9% in 2025 — considerably higher than many people assume before they actually look into it.

What People Actually Claim For

Musculoskeletal conditions — back and neck problems in particular — remain the single most common reason for a claim, accounting for around a third of payouts. Mental health conditions are the fastest-growing category, now representing close to one-fifth of all individual income protection claims paid, at £39 million in 2025 (ABI, 2025). Neither of these categories fits the mental image most people have of "the kind of thing insurance is for" — which is exactly why the cover tends to be undervalued until it's needed.

Why This Is Different for the Self-Employed and Internationally Mobile

Employed staff often have some level of sick pay or employer-provided cover to fall back on, even if it's limited. Self-employed professionals, contractors, and business owners — a common profile among expats — typically have none of that safety net, and statutory sick pay schemes rarely apply cleanly (or at all) once you're working outside your home country's system. For this group, income protection isn't a supplement to an existing safety net; it often is the safety net.

Structuring It Properly

• Deferred period — how long you can afford to cover yourself before payments start (shorter periods cost more).
• Benefit period — whether payments continue until you recover, retire, or only for a fixed term.
• Own-occupation vs any-occupation definitions — whether you're covered if you can't do your specific job, or only if you can't work at all.

This article is provided for general information only and does not constitute financial or insurance advice. Statistics cited are drawn from ABI industry data (linked above) and reflect the UK market generally, not Meridian's own client claims. Please speak to an adviser about your specific circumstances.