Losing your income because of illness or injury can create pressure very quickly.
For many UK families, monthly bills, rent, mortgage payments, childcare costs, food, and everyday expenses depend on a regular income. If that income stops, even for a few months, financial stress can build fast.
This is where accident and sickness insurance, often referred to as income protection insurance, may help.
In this guide, we explain what accident and sickness insurance is, how it works, who it may benefit, and when it could be worth considering.
What Is Accident and Sickness Insurance?
Accident and sickness insurance is a type of protection insurance designed to pay a regular monthly benefit if you are unable to work because of illness or injury.
It is commonly linked with income protection insurance, because its main purpose is to help replace part of your income while you are off work.
Unlike life insurance, which usually pays a lump sum if you pass away, accident and sickness insurance is designed to support you while you are still living but unable to earn.
The monthly payments can help cover essential expenses such as:
- Mortgage payments
- Rent
- Household bills
- Food and everyday living costs
- Childcare costs
- Loan or credit commitments
- Family expenses
This type of cover can help protect your financial stability during a difficult period.
Why Consider Protection Insurance?
Life does not always follow plan.
An illness, injury, accident, or serious health issue could stop you from working for weeks, months, or longer. Without a financial backup plan, this can create serious pressure on your household finances.
Protection insurance is designed to reduce that risk.
It can give you reassurance that, if you are unable to work, you may still have money coming in to support your essential costs.
There are three common types of protection insurance many UK families consider:
| Type of Cover | What It Usually Does |
|---|---|
| Life Insurance | Pays a lump sum to your loved ones if you pass away during the policy term |
| Critical Illness Cover | Pays a lump sum if you are diagnosed with a covered serious illness |
| Income Protection / Accident and Sickness Insurance | Pays a regular income if you cannot work due to illness or injury |
Each type of protection covers a different financial risk.
How Does Accident and Sickness Insurance Work?
Accident and sickness insurance usually pays a percentage of your income if you are unable to work due to illness or injury.
Many income protection policies pay around 50% to 65% of your income, depending on the provider, policy type, and your circumstances.
The exact amount, terms, and conditions will depend on the policy you choose.
Key Features to Understand
Before choosing accident and sickness insurance, it is important to understand how the policy works.
Deferred Period
The deferred period is the waiting time before payments begin.
For example, your policy might start paying after:
- 4 weeks
- 8 weeks
- 13 weeks
- 26 weeks
A longer deferred period may reduce the monthly premium, but you would need enough savings or sick pay to cover that waiting period.
Benefit Period
The benefit period is how long the policy may continue paying you while you are unable to work.
Depending on the policy, payments may continue:
- For a set period, such as 12 or 24 months
- Until you return to work
- Until retirement age, depending on the policy selected
Premiums
The cost of accident and sickness insurance depends on several factors, including:
- Your age
- Your health
- Your occupation
- Your income
- The level of cover
- The deferred period
- The benefit period
- The policy terms
A protection adviser can help explain which options may suit your needs and budget.
Who Can Benefit from Accident and Sickness Insurance?
Accident and sickness insurance may be useful for people who would struggle financially if their income stopped.
It can be especially relevant if you:
- Are self-employed
- Work freelance or on contracts
- Have limited or no employer sick pay
- Have a mortgage or rent to pay
- Have children or financial dependants
- Rely heavily on your monthly income
- Do not have enough savings to cover several months of expenses
For many UK households, even a short period without income could cause difficulty.
Example: Self-Employed Worker
Sarah is a self-employed graphic designer.
She becomes seriously ill with pneumonia and cannot work for three months. Because she does not receive employer sick pay, her income stops immediately.
With accident and sickness insurance in place, Sarah receives monthly payments after her deferred period. This helps her cover rent, bills, and essential expenses while she recovers.
Without cover, she may have needed to use savings, borrow money, or delay payments.
Practical Examples: When Could This Insurance Help?
Example 1: Joe, 35, Warehouse Supervisor
Joe slips and badly injures his back.
He cannot work for three months. His accident and sickness insurance has a 4-week deferred period.
After the first month, his policy starts paying 60% of his monthly income. This helps Joe cover his mortgage and household bills while he recovers.
Example 2: Emily, 42, Teacher
Emily is diagnosed with severe anxiety and is unable to work for six months.
Her income protection policy provides regular monthly payments during her time off work. This helps her manage her living costs without relying entirely on savings or credit cards.
These examples show how accident and sickness cover can help reduce financial pressure when work is not possible.
Is Accident and Sickness Insurance Worth It?
Accident and sickness insurance may be worth considering if losing your income would create financial difficulty.
The value of the cover depends on your personal circumstances.
Here are key questions to ask yourself.
1. Do You Have Enough Savings?
Savings can help you manage a short period without income.
However, many people do not have enough savings to cover several months of mortgage payments, bills, food, and family costs.
If your savings would run out quickly, accident and sickness insurance may provide valuable support.
2. What Sick Pay Do You Receive?
Some employers offer generous sick pay. Others only provide statutory sick pay or limited support.
Self-employed workers, freelancers, and contractors usually do not have employer sick pay.
If your sick pay is limited, income protection insurance may help fill the gap.
3. Do You Have Major Financial Commitments?
If you have a mortgage, rent, children, loans, or other regular expenses, losing your income could have serious consequences.
Accident and sickness insurance can help protect your ability to keep up with essential payments.
4. Could Your Family Manage Without Your Income?
Even if you are not the only earner, your income may still be important to your household.
If your family would struggle without it, protection insurance may be worth reviewing.
5. Are You Comfortable With the Monthly Cost?
Accident and sickness insurance does come with a monthly premium.
The right policy should be affordable and suitable for your circumstances. It is not about buying the most expensive cover. It is about choosing protection that fits your needs, budget, and risk level.
Accident and Sickness Insurance vs Other Protection Cover
Accident and sickness insurance is not the same as life insurance or critical illness cover.
Here is a simple comparison.
| Cover Type | Main Purpose | How It Usually Pays |
|---|---|---|
| Accident and Sickness / Income Protection | Helps replace income if you cannot work due to illness or injury | Regular monthly payments |
| Life Insurance | Helps protect loved ones financially if you pass away | Lump sum |
| Critical Illness Cover | Helps provide financial support if diagnosed with a covered serious illness | Lump sum |
Many people choose a combination of protection policies to cover different risks.
Other Protection Insurance to Think About
A wider protection plan may include:
- Life Insurance to help protect your family if you pass away
- Critical Illness Cover to provide a lump sum if you are diagnosed with a covered serious illness
- Income Protection Insurance to provide monthly support if you cannot work due to illness or injury
- Mortgage Protection to help protect mortgage commitments
- Family Protection to support household financial stability
The right mix depends on your income, family situation, debts, savings, health, and long-term responsibilities.
Common Reasons People Consider Accident and Sickness Cover
Many people look at this type of insurance when they realise how exposed their income is.
Common reasons include:
- They have recently bought a home
- They have started a family
- They are self-employed
- They have changed jobs
- They have limited sick pay
- Their monthly commitments have increased
- They want more financial security
- They do not want to rely on savings or borrowing
These are all sensible points to review when thinking about protection insurance.
Final Thoughts
Accident and sickness insurance can be valuable for many UK families and workers.
It may help protect your income if illness or injury stops you from working. It can also reduce the pressure of using savings, borrowing money, or falling behind on important payments.
Whether it is worth it depends on your income, savings, sick pay, family responsibilities, and monthly commitments.
For people with limited sick pay, self-employed income, a mortgage, or dependants, accident and sickness insurance may be an important part of a wider financial protection plan.
Speak to BSL Assured About Protection Insurance
Choosing the right protection insurance can feel confusing, especially when comparing income protection, accident and sickness insurance, life insurance, and critical illness cover.
At BSL Assured, we help UK individuals, families, homeowners, and workers understand their protection options clearly.
Get in touch with BSL Assured today for a friendly, no-obligation conversation about accident and sickness insurance and income protection options.
This article is for general information only and does not constitute financial advice. Insurance cover is subject to eligibility, underwriting, policy terms, conditions, exclusions, and provider acceptance. Not all illnesses or injuries are covered.