What is Income Protection?
Income protection provides you with a regular income, which is paid out if you cannot work due to medium or long-term illness or injury. It is designed to supplement some of your earned income if, due to illness or injury, you cannot earn an income yourself.
The cover pays out if you are out of work for longer than a period referred to as the “deferred period”, which typically ranges from 8 to 52 weeks. The cover normally pays out this benefit after the deferred period while you continue to meet the conditions of payment up to the date you return to work.
So why do you need to protect your income?
Most of us, when asked what our most important asset is, would probably reply that maybe it’s our property portfolio or investment portfolio. However in reality our most important asset is our ability to earn money into the future (i.e. our human capital) and it therefore is the centre of our financial existence e.g. a 30 year old earning €50,000 per annum would earn €3,113,797 in total to age 65 – assuming 3% increases in salary.
So now let us ask you “is this asset worth protecting? We would think “yes — most definitely”.
If you don’t protect your income and you are out sick long term, ask yourself how long do you think you could keep these going?
- Mortgage repayments
- Creche Fees
- Utility Bills
- Children’s Education
- Loan Repayments
- Car Repayments
Questions you need to ask yourself.:
Does your employer have a sick pay scheme in place and if so what level of benefits does it cover you for?
Are you entitled to any state benefits if you were to be out of work through accident or illness for a long time?
How much of my income can I cover?
If you are an employee – up to 75% of your income less any state disability benefit can be fully insured.
If you are self employed it’s 75% of last year’s earnings
To get the answers to your questions or if you would like to discuss Income Protection in greater detail and why its important that you should put some in place and get a personalised quote please contact Damien at: email@example.com or by phone on 021 4273334.