Income protection is a type of insurance that provides financial support to individuals who are unable to work due to illness or injury. It is designed to replace a portion of the policyholder’s income during a period of incapacity.
Have you ever considered how you could survive without an income for 3 months, 6 months, 12 months, until you reach state pension age of 66?
If you are unable to earn an income, as an employee you may be entitled to some state benefits (€11,440 per year *) and as a self-employed person, you are not entitled to any state benefits unless you have been unable to work for 12 months and its unlikely you’ll be able to work for the following 12 months.
*Based on 2023 disability rates.
In both cases, how do you survive with such a big drop in income?
For both PAYE workers and self-employed individuals, Income Protection is a solution, whereby you can cover up to 75% of your income, against being unable to earn your income because of sickness, accident, injury, disability, which is payable after a specified period and up until a specified age.
E.g. A 35 year old self employed accountant earning €60,000 per year can take out an income protection plan with a 3 month deferred period that will provide him with an income of €45,000 per year until age 65 (or whenever he is able to return to work to earn an income again)**
**This example is for illustration purposes only. We request quotes from the leading providers of Income Protection in the Irish marketplace.
What our Clients Love About this Product
What clients love about this product is apart from providing fully comprehensive sickness and disability cover – Income Protection/Salary Protection/Permanent Health Insurance (PHI) is very tax efficient in that for a company director taking out an Executive Income Protection policy, the director gets a 12.5% corporation tax deduction, when writing off the premium as a company expense on a monthly or annual basis.
Similarly for a sole trader or PAYE taking out a Personal Income Protection policy, a 40% tax deduction can be claimed from the Revenue which equates to a 40% discount in the cost of taking out this very important cover.
You can control your benefit and cost whereby:
- You can choose the deferred period e.g. 3/6/12 months.
- You can control the length of your policy e.g. to age 55/60/66 etc.
- You can control the amount of cover e.g. maximum cover is 75% of salary less state benefits
Get in touch with email@example.com and we will help you optimise your plan to suit your needs and budget.
Consult Your Broker About Supplementary Features on an Income Protection Plan
Hospitalisation Benefit: If you are admitted to hospital, a daily income is payable for every day you spend in hospital after day 7. This benefit is payable during your Deferred Period only and will continue for a maximum of 90 days for any one hospital stay.
Pension Protection: Some plans cater for additional cover which continues to protect pension contributions while being unable to earn an income
Terminal Illness Benefit: If you are diagnosed with a terminal illness and given less than 12 months to live, your Income Protection benefit payments will start immediately.
Mental Health Support: Some providers provide counselling services at no additional cost.
Second Opinion Medical Service: Some providers offer this service from a panel of best doctors around the world.
How to Get Started
Are you interested in Income Protection? Follow the steps below to get started with Mark Cahill Financial Services.
Alternatively, if you’re interested in Life Insurance, you can find out more HERE.
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