What is income protection insurance?
If you get sick or injured and need to take extended time off work, income protection pays you part of your monthly income. It can pay out for a range of conditions including cancer and mental health issues.
The amount you get will be treated as income for tax purposes and can help you protect your finances while you recover. The money can cover anything, like bills, mortgage repayments, rent and childcare costs.
It’s also called loss of income insurance, salary protection insurance or income insurance in Ireland. They’re all the same thing.
Do you need income protection in Ireland?
Income protection is the one policy every working adult should consider. It could be right for you if:
• You couldn’t cover your outgoings if you didn’t have an income
• You couldn’t pay your bills with Government benefits or you’re not eligible.
• You wouldn’t get sick pay (for example if you’re self-employed)
• You’re a single income household
• You’re the main income earner.
How much is income protection insurance in Ireland?
Your monthly premium will depend on things like:
• Your job
• Your age
• Your medical history
• Your family’s medical history
• If you’re a smoker
• How much alcohol you drink
• When you want the cover to kick in i.e. the deferred period
• What type of cover you choose.
How long does it take to get income protection in Ireland?
With most policies you usually have to wait a specified amount of time after you stop work for payments to start. This is called the deferred period, or waiting period.
You have a choice of deferred periods. This is usually done to match sick pay and the longer the waiting period the more affordable the premium is. For example, if you have six months of sick pay, then you would set your deferred period to six months. Some deferred periods can be set from 4 weeks to 52 weeks.
What does income protection insurance cover?
Income insurance covers you if you:
✔ Get sick or injured and can’t work
✔ Become disabled and can’t work
✔ Need to take time out of work due to mental health issues.
Income insurance won’t pay out if you’re:
✘ Dismissed from your job
✘ Made redundant
✘ Still getting paid sick pay
✘ If you’re off work for less than your policy’s deferred or waiting period
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