Income Protection

Have you ever thought about what your most valuable asset is? Most people think of their house or car – but the fact is that most people’s most valuable asset is their income.

Did you know that a 31 year old earning €35,000 a year will earn €1,200,000 up to the age of 65?

If you had an asset worth €1,200,000 would you insure it?

So how does income protection work?

Income protection provides you with an income in the event of you not being able to work due to any accident, Illness or disability. Some of the income protection benefits kick in after 7 days (hospitalisation benefit) but the main income replacement benefit will start after an agreed deferred period, usually 8,13, 26 or 52 weeks. Up to 75% of your income, less social welfare benefits (if any), can be protected up to the age of 65.

Some myths about income protection:

“ I don’t need income protection – the chances are I will never be out of work for that long”
The fact is that 1 in 6 people will be out of work for more than 6 months over the course of their working lives – is it worth the gamble? (Source: Friends first)

“ I’ll be covered by social welfare if I can’t work.”
For a single PAYE worker who qualifies for the state disability pension, the benefit is less than €200 per week – could you pay your mortgage/ESB/Car expenses/holidays out of that amount? More alarmingly, if you are self employed you are not entitled to this benefit at all. 

“ Alright, I think I may need this cover – but I won’t be able to afford it.”
Not so. Income protection is nearly always very affordable. It is rated on a  occupational basis, and also is eligible for tax relief – so if you are paying the higher rate of tax you will receive a 41% discount. If you are a company director, your company can pay this benefit on your behalf and write off the subsequent premiums as an expense – without attracting BIK.

“ Even if I get sick, the company won’t pay up.”
The market leader in income protection, Friends First, paid out over €15 million in claims last year – a figure that will increase this year.

“Income protection won’t cover my mortgage against redundancy cover.”
It is true that income protection does not cover against redundancy cover, so we have a dedicated scheme to protect your mortgage repayments against redundancy – contact us for a quotation.

If you are interested in any aspect of income protection or require a quotation please contact us on (061)226722, email Jim@powerinsurances.ie or fill in the call back form and we will be happy to contact you at a time that suits you.

Jim Power of Power insurances explains how he can help you source the best cover on the available market.