People don’t normally think of their current income and their future earnings as an asset.
However, in reality, the salary you earn pays for almost everything you have….your mortgage, bills, your car loan and much more. Without it you are facing into a pretty bleak future. People don’t want to think about what life would be like should disability or illness strike.
This is where Income Protection is vital and is appropriate to anyone who earns a salary, both the self-employed as well as employees, regardless of how old they are or what stage of life they are at.
With Income Protection you pay a monthly premium which is calculated based on your health and your occupation. This ensures that should you have an accident or illness which prevents you from working, your policy will kick in and pay you a regular income. Unlike specified illness cover, there are no restrictions on the type of illness, injury or disability that an income protection plan covers. This gives you complete peace of mind knowing that you have a safety net should the unpredictable happen. Best of all, you can choose and tailor an income protection plan that suits your individual circumstances. What’s more, as your needs and situation changes, you can adapt your income protection policy to suit changes in your life.
In general, people are quite optimistic about how they would manage if they were unable to work due to illness or injury. People over-estimate sick pay from employers and state supports. Some employers will pay sick pay for the first 6 months of illness or injury, however, most won’t pay near this amount. The State sickness benefit for 2021 is €10,556 per annum (for an individual) or €21,304.40 per annum for a married couple with a dependent spouse and 2 children under 12. If you are self-employed you will not qualify for the state illness benefit but may qualify for the invalidity pension which you can qualify for after 12 months of being incapable of work and can prove that you are likely to be unable to work for a further 12 months. The invalidity pension is €10,843 per annum for a single person or €22,328 for a married couple with a dependent spouse at home and 2 children under 12.
The reality for most people is that their “outgoings” either matches or sometimes exceeds their income. So being without that income will have a severely negative impact on their lifestyle.
So what can you do to protect your salary?
Talk to us today about Income Protection – it should form a core part of any financial plan.
See our income protection broker page for more information on our range of services.
Helen Connor O’Neill
Financial Advisor – Citywide Financial