As long as the premiums are being paid from your own personal account (and are not being paid by a business) under the current tax rules the regular payments under individual income protection policies are totally free from all forms of taxation. On our more recent Income Protection policy there is a fixed lump sum is paid if you die before the end of the policy term.
This lump sum will be paid to the policyholder and will form part of their estate for tax purposes. This means the lump sum may be subject to inheritance tax under current legislation, depending on their personal circumstances.
Any references we make to taxation is based on our understanding of current legislation and HM Revenue & Customs practice, which can change in the future.