If you can’t work for a continuous period of time as a result of any illness or injury, Income Protection pays a regular monthly benefit as a percentage of your salary until you are able to return to work or reach your selected ceasing age.
If you are a PAYE worker, you may be entitled to receive Illness Benefit from the Department of Social Protection. The current single persons benefit is €10,036 per annum, just €193 per week. If you are a company director or self employed, you will receive no State support if you are unable to work.
Even with the entitlement to Illness Benefit, can you really keep a roof over your head and pay your regular bills on €193 per week?
Figures correct as at 10/08/2016. Source: Department of Social Protection – www.welfare.ie
No. Sometimes this cover gets confused in people’s minds with Mortgage Payment Protection cover, where a benefit typically equal to the monthly mortgage repayments is paid for the first 12 months of a redundancy or sickness.
Income Protection covers your loss of income following a set period of absence from your employment as a result of injury or illness until you are able to return to work.
Most insurance companies will continue to provide cover if you change jobs, regardless of what the new job is entails.
You can continue your plan if you wish but you will not be able to make an Income Protection claim whilst you are unemployed.
The maximum Benefit you can purchase is 75% of your annual salary less any State Illness Benefit and any other Income Protection plans. For example;
|PAYE Employee||Self- Employed|
|75% of Salary||€37,500||€37,500|
|State Illness Benefit||€10,036||Nil|
|Max Annual Benefit||€27,464||€37,500|
This example is used for illustration purposes only. Figures correct as at 10/08/2016
|Deferred Period||Monthly Premium|
This example is used for illustration purposes only. Figures correct as at 10/08/2016 Source: www.adviserplus.ie. Represents best market rates for a male non-smoker aged 35 next birthday (1/1/1981) in a Category 1 occupation such as administration or similar
Figures correct as at 10/08/2016
Now, some questions for you!
Thank you for visiting us. Before you go, please try to answer the following questions;
• If I am sick, how long will my employer pay my salary?
• Does my employer provide any Income Protection cover for me?
• Am I entitled to the State Illness Benefit and if so, how much?
• How much would I need each month just to fund necessary expenses?
• How long could my savings last if I had to use them to pay these expenses?
If your answers are causing you concern, maybe you should talk to us on 1890 428 343
The information contained in this page is based on our understanding of legislation as at 10th August, 2016 which may change in the future. While great care has been taken to ensure the accuracy of the information it contains, we cannot accept responsibility for its interpretation, nor does it provide legal or tax advice.