Up to 75% of an employee’s salary can be covered when claiming income protection insurance.
The amount of salary covered depends on the terms of the policy. It can be set at 25%, 50% or 75% or at a level that suits the employee’s income needs.
The total amount of salary paid is also less any other scheme employees can claim, such as illness benefit.
For example, an employee may have a monthly salary of €2000 and be entitled to €400 of government benefits. They can claim for the current salary less the benefits, €2000 minus the €400, or €1600, in other words.
If the income protection policy is for 75%, then they claim for 75% of the €1600, which is €1200. The amount claimed will be paid for the agreed term of the income protection insurance policy.
The employee will receive the income protection payment at the agreed rate and after what is known as the deferred period.