Income Protection
Every day we wisely insure the things that matter, for example, our home, car and health, whilst saving for everyday expenses and holidays etc. After all, it makes sound financial sense. However, most of us take for granted the one thing that affords us these essentials of life – our income. For this reason, It may be wise to consider securing it with Income Protection.
Whether self-employed or an employee, have you set in place a plan to provide a source of income were you to become ill and unable to work? If self-employed, did you know you are not entitled to a government disability allowance, or as an employee, that employer benefits may only cover short-term absence due to illness? Therefore, regardless of your employment profile, insuring against a medium to long-term income gap is essential.
With Income Protection, a form of disability/sickness insurance, you take control of your financial security. By paying a monthly premium, which is determined by your employment and health status, you will receive a regular income for the complete duration of your illness until such time as you return to work.
Put simply, Income Protection means you can continue to afford the lifestyle you have worked hard for.
Why should I buy income protection?
Statistics show that a 30-year-old person is more likely to be off work due to illness or injury for a long period than to die before they reach the age of 65. If you had to give up work due to illness or injury, you would still have to pay your regular bills, such as mortgage and loan repayments and household expenses.
Here is an example of a typical ‘Income Protection’ customer:
Jenny is a 30 year old, non smoker, clerical officer earning €40000 a year. If she were unable to work due to an illness or disability she would receive €10623.60 per year in Illness Benefit from the State. This is not enough to maintain her -current lifestyle so Jenny decides to take out some income protection.
Guaranteed option
If Jenny wants peace of mind with a guarantee that her rates will remain the same for the duration of her plan, she could choose the ‘guaranteed income protection’ option. This option is slightly more expensive than the reviewable option below as Jenny is paying for the certainty that the rates she is charged will never change.
Reviewable option
However, if Jenny is less concerned about the rates guarantee and wants cheaper cover, she could choose the ‘reviewable Income Protection’ option. With the reviewable option, rates are guaranteed for the first five years only. After the first five years the rates may be reviewed. Jenny’s payments could go up or down, or remain unchanged. Jenny can cover up to 75% of her income against illness or disability. She could protect €19,376.40 (up to age 60) for the following costs, depending on whether she chooses the guaranteed or reviewable option
| Jennys monthly payments | Guaranteed Option | Reviewable Option |
| Before Tax relief | €53.13 | €43.58 |
| After tax relief | €31.35 | €25.71 |
(illustrative purposes only)
Affordable Tax Efficient Premiums
You choose the level of benefit and the various options you want to include and we calculate the premium based on that information and of course your health. And because your premiums qualify for tax relief up to 41%, it could be cheaper than you think to protect your lifestyle.
Terms & conditions apply.
