Normally, no: income protection does not cover redundancy. It pays when illness or injury stops you working, not when a job ends, and the documents of five insurers quoted on this page rule out a claim for losing your job. Legal & General's policy terms (QGI12745, April 2025; adviser site) put it in one line: "This policy doesn’t pay out because you become unemployed or you’re made redundant."

Because income protection is tied so closely to the work you do, it can help to have it looked at for your own job: filling in the short form gets you a free phone call from a broker, one authorised by the FCA.

Does income protection pay out if you are made redundant?

Income protection is built around one trigger. Zurich's terms (PWL850002003, April 2026; sold through advisers) describe a monthly benefit that replaces part of gross income when illness or injury leaves you unable to work. Losing a job is a different event, and the other insurers named here rule it out in plain terms:

  • Aviva's consumer page for Living Costs Protection lists redundancy and unemployment among the things the policy does not cover, and its FAQ adds that you can claim only if you are "working more than 16 hours a week when you become unwell or you’re injured".
  • Scottish Widows' policy summary for Protect Income Protection Cover (September 2025) states that the plan carries no unemployment cover and will not pay a claim on the grounds that you have become unemployed.
  • LV='s summary for its guaranteed-premium plan (April 2026) counts only illness or injury as a reason for not working, and names unemployment, bereavement and a normal pregnancy as examples it does not cover.
  • Royal London's plan details for its Personal Menu Plan (July 2026; available through advisers) say the cover "is not designed to pay out if the person covered becomes unemployed for any other reason".

Those are the wordings of the insurers named here, not a rule for every policy, so the place to check is the policy summary and conditions of the plan in front of you; comparing income protection plans sets other terms side by side. The same split explains why critical illness cover is a different product: it also pays on a medical event, not a work event. More in our critical illness and income guides.

What about being fired, resigning or taking voluntary redundancy?

On the policies quoted above, the way a job ends does not create a claim. LV='s summary, for one, will not pay "if the reason you’re not working is because you have chosen not to work or have become unemployed", which takes in resigning as well as being dismissed. What counts is whether illness or injury stops you working.

How the job ended can still matter later. Royal London's three-month rule, below, does not apply if you left your role voluntarily or your contract ended as a result of disciplinary action. Voluntary redundancy also counts against you on redundancy insurance, a separate product covered further down.

What happens to income protection if you lose your job?

There are two situations, and the documents treat them differently.

You are made redundant while well, and fall ill later

Some wordings keep your old occupation in view for a while. Royal London's plan details say that if your plan "is accepted on an Own Occupation basis" and you have been made redundant "and you become incapacitated within 3 months from when your employment ended, your claim will still be assessed against the Own Occupation definition". After more than 3 months, "you would be assessed under our Serious Illness definition". The rule does not come into effect if you left voluntarily, if your contract ended through disciplinary action, or if you did not meet the own-occupation requirements before the incapacity, such as by working under 16 hours a week.

Zurich's Own Occupation Guarantee works in a similar way: if you become unable to work "between jobs, and you left your last job within the last three months", it will "assess your claim based on your previous occupation and gross income". It does not apply if you left your last job more than three months ago, or if in that job you worked under 16 hours a week as a self-employed person or under 25 hours a week as an employee. Where you have done no paid work for the last three months, its House Person Benefit may apply instead: it pays the lower of your monthly benefit or £1,500 a month, and only if you cannot do at least three of six activities of daily living.

LV='s summary says that if you are already unemployed when an accident or sickness stops you working, "then you’re still covered", though the most it pays could be limited to £1,500 a month, depending on how long you have been unemployed. Aviva's policy conditions (AL19002, October 2024) ask you to review your cover if you become unemployed or choose to stop working, and measure incapacity against the occupations you followed in the 12 months before the illness or injury.

LV= also has a feature that reaches unemployment itself. If you become unemployed "through no fault of your own (we call this involuntary unemployment), you can claim for up to six months premiums to be paid by us", with six months the most over the whole life of the policy. If you become unemployed within the first 90 days of the policy starting, none of the premiums for that period of unemployment are covered. The feature keeps the cover in place; it pays you no income. Whether a plan you are weighing up has terms like these is something a broker can check; mention it when you send this page's form.

You are already claiming when the job ends

Legal & General's terms list when monthly payments stop, including when "you’re no longer incapacitated or you no longer have a loss of income" and when "your policy ends"; Zurich's list is along the same lines. Neither list mentions redundancy, so whether a job ending mid-claim changes anything depends on the policy: put the question to your insurer in writing before you rely on an answer. How a policy fits around sick pay is covered in how much income protection you need.

Is there separate cover for redundancy or unemployment?

Yes, but as different products. MoneyHelper's guide to insuring yourself against redundancy, as archived in June 2025 (worth checking against the live version), lists three: mortgage payment protection insurance, which "typically starts to pay your mortgage repayments three months after your earnings stop and continues to pay out for up to 12 months"; payment protection insurance, "sometimes called Accident, Sickness and Unemployment (ASU) cover", which you may have taken out with a personal loan or credit card; and short-term income protection, which replaces part of your income for a fixed period, usually 12 or 24 months. It adds: "It’s important not to confuse this with other income protection policies, which usually won’t pay out if you lose your job."

The same guide advises against buying once redundancies at your employer have been announced or rumoured, since "you won’t be able to claim", and says that if you take voluntary redundancy "the insurer won’t usually pay out". Part-time, self-employed and temporary workers are told to check carefully, because many such policies will not cover them, and there is "nearly always a gap of about three months before the payments start". How the mortgage version works, including its deferred period, is on mortgage protection and redundancy, and income protection and a mortgage compares the two.

What help does the state give if you lose your job?

GOV.UK's guide to Jobseeker's Allowance says you can apply for New Style JSA "to help you when you’re looking for work". Among the conditions, you must have worked as an employee and paid Class 1 National Insurance contributions, usually in the last 2 to 3 years, be 18 or over and under State Pension age, and not be working 16 or more hours per week. Your savings and your partner's do not affect the claim. Someone aged 25 or over can get up to £95.55 a week (the rate shown on 19 October 2026), for up to 182 days (about 6 months). You agree to look for work, and payments can be reduced or stopped if you do not keep to that agreement and cannot give a good reason.

If illness or disability is what stops you working, JSA is not the benefit: you will not be eligible, and the guide points to Employment and Support Allowance instead. New Style ESA is open to people "employed, self-employed or unemployed" who are under State Pension age, have a health condition that affects how much they can work, and have paid enough National Insurance contributions, usually in the last 2 to 3 years. You cannot get it if you claim JSA or Statutory Sick Pay. While a claim is assessed you normally get the assessment rate for 13 weeks, up to £95.55 a week if you are 25 or over.

You might get Universal Credit at the same time or instead. New Style JSA counts as income for Universal Credit, and Universal Credit is reduced by the amount of any New Style ESA. MoneyHelper's income protection guide notes that some people decide they could live on government benefits, "provided they’re enough to cover all your outgoings". If you are self-employed, the JSA guide says you will not be eligible "if you were self-employed and only paid Class 2 National Insurance contributions", with narrow exceptions; see income protection for the self-employed.

Frequently asked questions

Can you get income protection insurance if you are unemployed?

Not from the insurers checked here. Zurich requires you to be employed or self-employed and working at least 16 hours a week when the policy starts, and LV= says "we are unable to offer cover to people who are unemployed", treating anyone claiming Jobseeker's Allowance as unemployed. A broker can ask other insurers about your position but cannot promise acceptance.

Does New Style ESA reduce an income protection payment?

Not under Legal & General's terms, which say "any state benefits (such as contributory Employment and Support Allowance (ESA) and Statutory Sick Pay) will not be deducted from the monthly benefit". Other insurers set their own rules on what they deduct, so check the conditions of your plan.

Whenever you are ready, the short form is the way to ask a broker for a call about cover that fits your work, at no cost.

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