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Income Protection

Income Protection

If you are working full-time or are self-employed and you become unable to work, income protection insurance might be something you wish to consider, especially if you have other people depending on your income. You might not be entitled to sick pay in work, or the benefits you are eligible for may fall short of your salary. Before you take out income protection insurance you should check what you are entitled to with your employer.  This is to see if it covers you and/or your dependents.

What it does?

Income protection insurance pays out a regular cash payment that replaces part of your lost income if you can’t work.  This could due to a medium to long-term illness or disability.   You can ensure you continue to meet your monthly mortgage repayments and household bills and maintain your current standard of living.

It will continue to pay you an income until you are well enough to return to work, or if not, until your retirement age. Income protection insurance does not cover redundancy. To have income protection insurance cover you generally must be in full-time paid work or be self-employed.

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You may need income protection if you:

  • Are self-employed and would have no source of income if you couldn’t work due to illness or disability
  • Do not have sick pay from your employer
  • Have no ill-health pension protection
  • Have dependants who rely on your income
  • Do not have any other source of income
  • Do not have sufficient benefits to replace your lost income and/or cover your expenses

How much does it cost?

Frequently Asked Questions

You can take out income insurance if you are in full-time work or are self-employed and earn an income. It protects you only in these circumstances – it will not be paid if you become unemployed. You must keep up your payments to stay on cover.

Serious Illness cover will not replace a portion of your salary when you are out of work with an illness. It will instead pay out a lump sum if you suffer from one of the illness’s listed under your cover.

Income protection works as a replacement income should you become unable to work for a period of time, due to an illness or injury.

People most commonly consider taking out an income protection policy, if:

  • They would struggle financially without their salary
  • They have dependants
  • Employed but don’t have long term sick pay benefits
  • They’re self employed

The costs of taking out income protection insurance are affected by:

  • your age – the older you are when you take out the policy, the more you are likely to pay, as your risk of getting ill increases
  • your sex – men make slightly more claims than women, so may pay more
  • Health – if you’re in good health, you will pay less to insure yourself
  • Job – if you do a risky job, you will pay more for cover
  • hobbies and lifestyle – if you take part in dangerous hobbies or you smoke or drink heavily, you will pay more for cover
  • the waiting period – the longer you can wait before you make a claim, the cheaper your premiums will be
  • whether you might be prepared to do other kinds of work than your own if you get ill – it usually costs less to take out income protection insurance if you say you will only make a claim if you are unable to do any work at all, rather than just your own job.

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IPS Financial Advice Limited is regulated by the Central Bank of Ireland

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