Benefits of Income Protection

Income protection insurance provides a regular monthly income that is up to 75% of your regular salary if you are unable to work due to illness, injury, or disability.

The policy will pay this monthly payment until you are fit to return to work or for the remainder of the term of the policy if you remain unable to work

You may choose a policy term that covers you up to retirement age, up to age 70, or for a different length of time e.g. remainder of your mortgage term.

Income protection insurance is especially valuable if you are in employment that does not offer generous sick pay or if you are self employed. And, therefore, not entitled to sick pay or social welfare benefits.

Income protection offers a range of benefits to support your return to work following a period of illness, injury, or disability.

Insurers offer a range of benefits such as counselling, physiotherapy, medical second opinion, and rehabilitation supports to enable you to return to employment, depending on the insurer.

You may be able to receive some benefit from your insurer in the transition of returning to work. 

You may also be able to retain a partial income protection benefit if you return to work part time or you may be able to retain a proportion of your income protection benefit if you return to work at a lower salary than you previously earned.

Income protection premiums are subject to tax relief at your marginal rate of tax. This means that you can claim up to 40% tax relief on your premiums.

You may choose to pay premiums of up to 10% of your annual income and avail of this tax relief.

However, benefits you receive should you make a claim on your income protection policy are taxable.

You can purchase group income protection as a company for your employees. Group income protection is a benefit which will provide financial protection if your employees are unable to work due to illness, injury, or disability.

Group income protection can extend sick pay for eligible employees and can be used to supplement state payments to maintain their standard of living while unable to work. 

Insurers who provide group income protection generally offer support and rehabilitation to assess your employees’ fitness to return to work and to assist them to return to work as soon as possible. In this way, group income protection can help your company to manage employee absences.

Group income protection is tax efficient as the premiums paid by the employer can be offset against corporation tax and the benefits for employees can be provided through their regular payroll. Group income protection generally has a lower cost and less strict underwriting conditions than individual income protection policies.

The protections offered by income protection give you peace of mind and freedom from worry about a loss of income due to illness, injury, or disability. 

If you are an employee, the statutory sick pay entitlement currently stands at 5 days. If you were unable to work for more than a short period of time, it would be difficult to continue to meet your usual outgoings and financial commitments. If you are self employed, your income could be suddenly and unexpectedly reduced if you became ill or injured.

Income protection provides the safety net of a regular income so that you can focus on getting better and, hopefully, back to work. This can give you breathing space at a difficult time.

Income protection insurers also offer support and rehabilitation which will give you options, to return to work as soon as possible, to work in a reduced capacity if necessary, or to retrain should you be able to.