Have you ever thought how you would cope financially should you be unable to work due to illness or accidental injury? How would you pay the mortgage and other household bills? Would you be able to maintain your current lifestyle?
An Income Protection, or Permanent Health Insurance plan will provide an income if you are unable to work through ill health or accident. The policy pays a monthly tax-free income for a set length of time - normally until retirement. The level of income paid will normally be based on a percentage of your pre-disability earned income and can be set to rise with inflation. The income is paid as long as doctors agree that you are unable to work for health reasons.
Income Protection differs from a similar product called critical illness insurance which only pays out if you contract one of a list of specified illnesses (even if the list is pretty long). Income protection insurance also just pays out steadily over the period that you are unable to work, as opposed to critical illness insurance, which generally pays a straight lump sum.