Income Protection

Income Protection provides a monthly payment if you cannot work through illness or injury. It is very broad cover covering serious illness, physical injury and mental illness. This makes it the best illness cover available for you to get to protect your income, your most most important asset.

Income Protection Policies have a deferral period after which monthly payments start. This is a minimum of 4 weeks but some companies have a minimum of 8 weeks. Income Protection can up to a maximum of 75% of your income less state benefit and other income protection policies you have in place. You can opt for as much cover as possible such as 75% of income or a lower, more cost effective, level of cover just to cover basic bills.

Most people are entitled to the State Illness Benefit (https://www.gov.ie/en/service/ddf6e3-illness-benefit) which is approximately €200 per week. Many businesses do not provide illness pay which would mean your income could drop to €200 per week. Given the cost of living in Ireland at the moment, few could pay mortgage and bills on that.

The easiest way is to put a case study together:

A married couple – John and Susan, with two children, earn €40,000 per annum each. This means a net pay of €2,850 each. Their monthly bills are as follows:

• • • Mortgage payment – €1,400
    • Creche Payment – €1,600
    • Personal/car loan – €400
    • Shopping – €1,000
    • Utilities – €300
    • Sundries (coffees, family trips etc) – €200

John becomes ill suddenly and cannot work. This leaves Susan with all the household bills (€1,400 + €1,600 + €400 + €1,000 + €300 + €200) of €4,900 and an income of €2,850.

An income protection policy can prevent this financial pressure and stress by providing substitute income into the household. If John took out his maximum Income Protection allowance it would be (€40,000 X 0.75)-(52 X €200) = €19,600. This would be a substantial contribution to the household and would alleviate financial pressure.

Contact us today for information +353 (87) 778 5325‬

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