Income Protection Insurance (IPI) is an insurance policy, available principally in Australia, Ireland, New Zealand, South Africa, and the United Kingdom, paying benefits to policyholders who are incapacitated and hence unable to work due to illness or accident. IPI policies were formerly called Permanent Health Insurance (PHI). The same concept is instantiated in the United States as disability income insurance (disability insurance).

A study by British insurer Legal & General, entitled Deadline to the Breadline Report 2014, found that only 8% of UK households have income protection insurance.^[1]

United Kingdom

Income protection is not tax deductible in the UK, however exceptions are available for the self employed and for company directors.^{[citation needed]}

Australia

Income protection in Australia is tax deductible though the payments received are taxable.^[2]

Ireland

Income protection insurance in Ireland is widely considered the most tax efficient of insurance as the governments of Ireland.^{[citation needed]} Higher earners can claim back up to 40% of their premiums back as tax relief annually.^{[citation needed]} In Ireland, the maximum payout threshold is 75% of prior gross salary.^{[citation needed]}

New Zealand

Income protection insurance in New Zealand is more complicated an depends on whether or not the payments are related to super.^{[citation needed]} In most cases it is tax deductible.^{[citation needed]}