If you were unable to work and your earnings ceased, would you be able to survive on the current State Disability Benefit of approximately €188.00 per week? If you are Self Employed or a Proprietary Director, you may not even be entitled to the State Disability Benefit!
An Income Protection policy provides you with a replacement income, in the event you are unable to work due to an accident, sickness or disability, paying you up to 75% of your monthly income. This payment is paid after a deferred period, which is the waiting time between being unable to work and commencement of payment of the benefit, normally 26 weeks. Benefits are then paid until either you can return to work, to the end of policy term (normally retirement age) if you are never able to go back, or death; whichever is sooner.
Income Protection is available to those in full-time employment or who are self-employed. It protects you if you are out of work for long periods of time due to illness or disability, but it does not cover you in the event of being made redundant.
To qualify for Income Protection Cover you must typically work at least 16 hours per week. Some occupations are not covered for Income Protection, and it may not be offered to you if you have a significant medical condition.
Income Protection offers you financial security for yourself and your family if you are unfortunate enough to be out of work because of an illness or accident and suffer a loss of earnings as a result. In the current economic climate there is no doubt that many people now realize their most significant asset is their income.
“85% of the Irish workforce don’t have any form of income protection and will be relying on their employer and the State to continue paying them if they are too ill to work. Lots of employers don’t provide any form of sick pay and for those who do, the majority will only pay you for six months.” New Ireland Assurance
Cost is on an individual basis, mainly structured to the Deferred Period and your Occupational Class as well as the following:
- Benefit (amount chosen – up to 75% of your gross income, less any other income, sick pay or welfare benefit)
- Term (retirement age chosen)
- Deferred period (8, 13, 26 or 52 weeks)
- Occupation (Grouped into classes as some occupations are riskier than others effecting your premium costs)
- Smoker or Non Smoker
- State of Health