The amount of cover you require, and when you receive payment, depends largely on what resources you already have. Maybe your contract of employment states that your employer will pay you for the first six months, in which case you need your cover to commence from month seven of your sickness.

If you are self employed with savings you can draw on for the first three months, you should start cover from the fourth month. You should take into account any state benefits you will receive, when calculating the cover you need.

The great advantage of Income Protection (IP) is that you can tailor it to suit your lifestyle. You make decisions on the amount of cover required and when it should start.

How much will it cost me?

Your personal circumstances and the nature of your employment will decide the amount of premium you pay.

Premiums vary enormously with the cost being assessed on your gender, general state of health, occupation, the level of cover required and whether you are a smoker. Women will be sad to learn that they generally have to pay more than men.

Consider this example. Non-smoking man…..administrative job……age 30…..…his premium is 17 pounds to 36 pounds a month, which pays out 1,000 pounds a month benefit after 6 months. In contrast, a decorator of a similar age would pay between 35 pounds and 112 pounds a month, depending on whom he chose as his provider.

Gender, occupation and whether you smoke are not taken into account with age related policies.

Your job may affect the amount you pay

The amount you pay for a policy may be influenced by the type of job you have. An exception to this rule is an age related scheme. The majority of insurers divide job types into 4 categories of risk.

We requested providers of income protection insurance to tell us the way in which they grouped jobs, and to provide us with examples of typical jobs in each group.

Some examples follow, but there is a word of warning, as the same job may be categorised differently one insurer to another.

• Class 1 Managers, administrative staff and professionals. Limited business mileage. Secretary, computer programmer, administration clerk

• Class 2 Some workers having a high busines mileage exceeding 20,000 miles a year. Engineer, shop assistant, florist. Light skilled manual work.

• Class 3 Some semi-skilled and skilled manual workers. Plumber, teacher, care worker

• Class 4 Some unskilled workers and heavy manual workers. Mechanic, bar person, construction worker

Unpaid workers

Just because you have no income does not mean that cover is not needed. For example, a carer, looking after an elderly relative, may develop a long term illness and be unable to carry out their caring duties. Would the rest of the family be able to stand in, or would they need insurance cover to pay for an expensive carer from outside the family? However, a word of warning, some policies do not provide cover for carers.