Ask the insurance company to clarify what they define as "employment". Some companies define being in employment as working a specified number of hours per week. If you are working less than this number, you are technically unemployed by their definition and they simply wouldn't pay a claim.
Hard to advise on the health side, as if your health isn't brilliant by your own description, you'd might have trouble getting Income Protection cover again, depending on what you mean by "not brilliant". You'd have to weigh this possibility against the thought that you may currently be paying for cover that simply wouldn't pay out at all.