An income protection plan is a very simple and tax efficient insurance policy that will pay out a regular income if you are unable to work due to ANY illness, injury, accident or disability. If you can’t do your job because of an illness, this policy will pay you a salary. This means that you can continue to pay all of your regular household bills like your mortgage, children’s school fees, groceries etc.
Income protection plans are not just for self-employed people – they are for anyone who earns an income through working. Not all employers will pay their staff indefinitely if they were unable to work. In fact, most employers in Ireland wouldn’t. People take out income protection plans for security and peace of mind. Knowing that you would still have money coming in every month in case something unexpected happened to you is a very nice place to be.
You can cover a maximum of 75% of your gross annual income (before tax) with an income protection plan. Before you start your policy you choose after how long you would like it to begin paying you a benefit. The choices are 4 weeks, 8 weeks, 13 weeks, 26 weeks and 52 weeks. This is known as the deferred period – the length of time between when you are first unable to do your job and when the benefit becomes payable. The longer the deferred period, the lower the monthly premium. You must also choose how long you would like the policy to pay you for. This is normally up to your chosen retirement age, but they tend to be up to age 55, 60 or 65, although a new entrant to the market in 2015 allows cover up to a retirement age of 70. The longer you are on cover for and the longer your policy will pay you, the higher the monthly premiums.
The premiums that you pay towards your income protection plan qualify for tax relief at the marginal rate, which is currently 40%.
Just four life assurance companies in Ireland offer income protection plans and Med Protect deal with all of them. The 4 life assurance companies are Aviva Life & Pensions (they bought out the previous income protection market leader, Friends First), New Ireland, Irish Life and the new entrant, Royal London (Previously known as Caledonian Life). They each offer different plans, so we will help you choose the one that suits your needs best.
We will tell you all you need to know about individual income protection policies. We will explain the details of the plan to you in full, provide you with a personalised quote, answer any questions that you may have and organise your policy for you.
Some points worth noting;
- If you are self-employed, you are not entitled to State disability benefit.
- State disability benefit is only €203 per week for an individual and may be payable for a maximum of 2 years only.
- If you are employed, you should consider how long you will be paid by your employer if you are out of work due to ill health. Your employers can inform you of your entitlements.
Call a Med Protect advisor today to organise a meeting to see just how easy and inexpensive an income protection plan can be. Phone 01 668 6136 or complete the quote request form here.