Can I have more than one income protection policy?
Yes you can have more than one policy. Your policies may be designed to cover your income over different time periods and in different situations. However it is important to remember Income protection benefits are capped at 75% of your income, less any social welfare payments you may be entitled to, no matter how many policies you have.
Will having income protection insurance affect my sick pay?
No it will not affect your sick pay from work. The idea is that the Income Protection policy takes over once your sick pay ends. If you are off work due to illness or injury, some employers will continue to pay you for a set period – some will pay you for up to a year, some won’t pay you at all. Before you take out an Income Protection policy you will need to check how long your employer will continue to pay you for if you are off work sick. The longer you receive a salary through your employer, the longer you can make your deferred period (see question below on deferred period). You cannot receive payments from your income protection policy until your sick pay through your employer ends.
What is a deferred period?
Your deferred period is the amount of time that you have to wait before your policy pays you. When you set up your policy initially, you need to decide when you want your payments to start should you put in a claim. So for example if your employer continues to pay you for six months while you are off work sick, you can choose to have your benefits start at 6 months when your sick pay through work runs out. The options for the deferred period are 4, 8, 13, 26 or 52 weeks. The shorter the deferred period, the higher your premium will be. If you are in a position to choose a deferred period of 13 weeks or more, you will see a sharp decrease in premiums. However you should ensure that you can survive financially for 13 weeks without payment before you choose this option (or indeed the 26 or 52 week options).
How long does Income Protection last for?
If you put in a claim for Income Protection, you will be paid until you return to work or when your policy ends. (at your retirement age)
Can I get income protection if I’m self-employed?
If you’re self employed, you won’t have benefits like an employee would, so income protection is something you definitely should consider. Income Protection will give you the peace of mind that you’re financially protected should you be unable to work.
How does Income Protection work if you are self employed?
Being self-employed can have many benefits, but being your own boss means that you don’t have access to traditional employee benefits. That’s why you might want to think about income protection. With Executive Income Protection the premiums are paid through the company. If a claim is submitted, the benefits are paid to the company and in turn the company pays you. Executive Income Protection can be treated as a tax deductible expense.
How much of my income will it cover?
Income Protection or Income Continuance as it is sometimes called covers up to 75% of your current gross monthly salary ( less and social welfare payments you may be entitled to)
Does it pay out if I lose my job?
No, Income Protection will not pay out if you lose your job or take redundancy. It will only pay out if you are unable to work due to illness or injury. There is no such product in the Irish market at present.
How do brokers get paid for Income Protection policies?
Brokers do not charge the client a fee. The insurance company pays the broker. That’s why it makes sense to use an independent broker such as Citywide Financial as they research the market with a zero cost to you.
We deal with all of the Income Protection insurers on the market so can compare all of the policies for you. Speak to one of our expert Income Protection advisors today to get a quote.
If I can’t get Income Protection, are there any other options?
Income Protection is the best way you can protect yourself from whatever life throws at you. However there are alternatives to consider as well. Serious illness cover will pay you a tax free lump sum upon diagnosis of a specified serious illness. This combined with accident cover is often considered as an alternative to salary protection. Accident cover will pay you up to €400 a week for 1 year should you have an accident which prevents you from working. Aviva also has an alternative product called Wage Protector. It is designed to be a lower cost option to the traditional product however unlike traditional Income Protection insurance which continues to pay you until you return to work or when your policy ends, Wage Protector covers you for up to two years initially and you will be assessed via a medical at that stage. Royal London also have a alternative offering to Income Protection called Multi Claim Protection Cover. It provides financial support, based on the impact caused by a medical condition or treatment and the severity of that impact.
What do I need to get an Income Protection quote?
• Your name • Your date of birth • Your occupation • Whether you’re employed or self-employed • If you smoke or use nicotine-based products • The deferred period you choose • The amount of cover you want. This is based on your income.
What is the premium waiver for Income Protection?
Income Protection premium waiver means that you don’t have to pay premiums while your Income Protection benefit is being paid to you.
I don’t smoke. Are my premiums for Income Protection cheaper because of this?
Statistically non smokers enjoy better health than smokers. When you start your policy if you have not smoked any tobacco products during the previous12 months, then you are rewarded with lower premiums than you would if you were a smoker.
Can I get Tax Relief on Income Protection?
Yes, you can claim full tax relief on all the income protection premiums you pay at your marginal rate of tax. Current tax rates in 2021 are 20% and 40%. This is only available if you pay income tax and it is up to you to claim the tax relief. In order to do this you can either contact revenue who will adjust your tax credits, or if you are submitting an end of year tax return you can include it in that and receive a tax rebate.
Can I increase my Income Protection cover?
Do you need more cover than your current policy gives you? Has your salary increased and you need to increase your Income Protection cover to reflect this? You can top up your policy to give you additional cover – up to a maximum benefit of 75% of your current earnings. Some of the insurers will allow you to increase our cover by 20% of your original cover every 3 years without further proof of health. If you choose to top up between these periods, the insurers will take your age, health and pastimes into account. If you’re accepted for additional cover, you will be charged the rates applicable at the time of your top up.
I have changed my occupation. Will this affect my Income Protection premium?
If you change your job your cover will continue regardless of what the new job entails and there will be no change in your premium rate.
Can my employer pay my income protection premium?
Yes your employer can pay your income protection premium. This is called executive income protection. There is no tax relief on this premium; however it can be treated as a tax deductible expense by your employer. If there is a claim on an executive Income protection plan, the benefit is paid to the company and the company in turn pays the employee.