Cover comparison · 2026
Life Insurance (Term) vs Income Protection
Life Insurance (Term) and Income Protection are often confused because they sit close together — but they protect against different things. This side-by-side shows exactly what each covers, what it excludes, the typical UK cost, and how to decide which one (or both) you actually need.
At a glance
Life Insurance (Term)
Term life insurance pays a lump sum if the policyholder dies within the specified term. Provides financial protection for dependants — mortgage repayment, income replacement, or family security.
Typical UK premium: £80–£600/yr
Available in: United Kingdom, Ireland, Armenia
Income Protection
Pays a regular monthly income if you are unable to work due to illness or injury. Covers up to 60–70% of your gross income until you recover, retire, or the policy term ends.
Typical UK premium: £200–£1,500/yr
Available in: United Kingdom, Ireland
What each policy covers
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What each policy excludes
| Life Insurance (Term) | Income Protection |
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Choose Life Insurance (Term) if…
- You need to protect against: lump sum death benefit.
- You need to protect against: terminal illness benefit (typically included).
- You need to protect against: option: decreasing term (mortgage protection).
- Your budget for this risk is around £80–£600/yr.
Choose Income Protection if…
- You need to protect against: monthly income payment (up to 60–70% of gross earnings).
- You need to protect against: covers any illness or injury preventing work.
- You need to protect against: short or long-term payment periods.
- Your budget for this risk is around £200–£1,500/yr.
Frequently asked questions
What is the difference between Life Insurance (Term) and Income Protection?
Life Insurance (Term): Term life insurance pays a lump sum if the policyholder dies within the specified term. Provides financial protection for dependants — mortgage repayment, income replacement, or family security. Income Protection: Pays a regular monthly income if you are unable to work due to illness or injury. Covers up to 60–70% of your gross income until you recover, retire, or the policy term ends. They protect against different events, so many people hold one, the other, or both depending on their circumstances.
Is Life Insurance (Term) or Income Protection more expensive?
Typical UK annual premiums run £80–£600/yr for Life Insurance (Term) and £200–£1,500/yr for Income Protection. Your actual price depends on your circumstances and chosen cover level — always get a live quote before deciding.
Do I need both Life Insurance (Term) and Income Protection?
Not always. Because life insurance (term) and income protection cover different risks, holding both gives the broadest protection, but many people only need one. Compare what each covers below and pick the cover that matches your actual exposure.
How much life insurance do I need?
A common rule of thumb is 10x your annual income for income replacement. For mortgage protection, match your outstanding mortgage balance. Use GeraSure's life insurance calculator for a personalised recommendation.
What is the deferred period on income protection?
The deferred period is the waiting time between your inability to work and the first payment. Shorter periods (4 weeks) cost more. Choose a deferred period that aligns with how long your employer sick pay or savings would last.
Compare real quotes for both
GeraSure shows FCA-regulated insurers side by side so you only pay for the cover you need.
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GeraSure is a comparison and referral service. Insurance products are provided by FCA-authorised or equivalent regulated insurers in each jurisdiction. GeraSure does not underwrite insurance policies and does not provide financial advice. Always read the policy wording before purchasing.