There are a wide variety of similar income protection policies that all differ in the details of the policy. As ever, our single piece of advice is to read the small print. Know what you're getting into and try to understand the implications.

Income protection is payable when the person covered by the policy becomes unable to work due to long-term sickness, or incapacity due to injury or disability. As with PPI, income protection policies will have a deferral period specified in the policy details. This is the length of time that you have to be out of work before benefits become payable. The standard deferral periods are usually 4, 13, 26 and 52 weeks.

To complicate matters, different insurers have their own definition of disability. You are only classed as disabled, sick or injured if you are unable to go back to the type of work that is covered by your policy. The four most commonly used are:

• Own job. The same job within the same company.
  
• Own occupation. The profession or occupation that you worked in before the enforced absence.
  
• Suited occupation. A suited occupation is one that may require a similar level of education, training, or experience. Any occupation. As it says, really. To fit this bill you have to be considered as totally unable to perform any occupation whatsoever.

In addition to this, there are certain diseases and causes of disability that are usually excluded. The insurer will rarely pay out if you suffer disability caused by:

• Yourself. Intentionally self-inflicted injuries are virtually never covered.
  
• War or rioting
  
• Alcohol or non-prescribed drug use
  
• Failure to follow medical advice
  
• Complications with pregnancy or childbirth
  
• Aids, though if you contract it through accidental exposure in the medical professions, you may still be covered

If you keep your part of the bargain, the insurer must keep theirs. As long as you pay your premiums on time and comply with the terms of the policy, the insurer cannot cancel the policy or increase the premiums no matter how many claims are made.

Part of your responsibility is to keep the insurer informed about changes in your circumstances, such as a new job. They will usually then have the right to reassess your premium. If you go from being a telephone operator to a nightclub bouncer, you are likely to face a steep hike in your premiums, based on the the obvious increase in risk to your health. If you become unemployed for any reason not covered by the policy, you must still inform them. They will probably be keen to discontinue the policy (at least until you return to work), as you do not have an income to protect!

There are also several different types of premium throwing further confusion into an already complicated melting pot:

• Guaranteed premium. The premium is set at the beginning and does not change at all throughout the life of the policy.
  
  
• Renewable. These usually run for a 5-year term after which you have the right to renew the policy, regardless of your state of health. The premium is recalculated when you renew.
  
  
• Unit linked. The premium can depend on investment performance or claims levels that the company is experiencing. If a company exceeds its investment objectives, these policies can build up a cash value. If they underachieve, you may face increased premiums for the same level of cover.