Don't Let Your Lifestyle Vanish in These Difficult Times

Have you thought about what would happen to your lifestyle if an injury or illness were to prevent you from working and earning an income? How would you pay for your mortgage, energy bills, personal or car loans, education and the upkeep of your home? If the worst was to happen, you might think that you could rely on your employer to provide you with an income while you are sick or injured and unable to work. However, research shows that less than 15% of workers in Irish companies would receive sick pay from their employers for more than six months*, while those who are self-employed would receive no sick pay at all. This means that 85% of private sector employees would be fully reliant on the State Illness Benefit if ill or injured. In 2008, this would entitle them to just €10,286 per year for a single person. For those who are self-employed, they are not eligible for even this benefit.

"Protection means peace of mind"

Fortunately, there is an answer. It’s called Income Protection, and it ensures that if an illness or injury prevents you from working, then your lifestyle can be protected. It covers you for any illness or injury which prevents you from working. Income Protection is a very straightforward way of ensuring that your most pressing financial commitments are met and offers you complete peace of mind.

With Income Protection you pay a monthly premium which is based on your occupation, your health, your income and the level of financial protection you require. You can protect up to 75% of your income, up to a limit of €175,000 per annum**, less the applicable Social Welfare entitlements. You decide what age you want your policy to finish at, with a choice of ceasing ages available i.e. 55, 60, or 65.

"Tailored to meet your needs"

Income Protection has a deferred period, which is the time between making a claim following illness or injury and receiving the benefit. If you are being treated in hospital during this deferred period you can also receive benefits through hospital cash cover. Another important point worth noting is that after making a successful claim there is no need for you to pay any premiums until your period of incapacity ends and you return
to work.

Because the Irish Government recognises the importance of planning for the possibility that illness or injury would prevent you earning an income, the Income Protection premiums you pay are eligible for tax relief at your marginal rate.

"Contact the experts"

Income protection as with any other insurance product is totally personal to the individual and the good news is that policies are very customizable and flexible. When considering putting a policy in place, make sure to contact a reputable company which has a proven track record in this area.

* Source: Lansdowne Market Research, April 2007

** Subject to the following formula: 75% of the first €125,000 of earned income (less Benefit-in-Kind taxes), plus 33% of the balance, to a maximum of €175.000 per annum, less Social Welfare entitlements