Income Protection

Your income is your most important asset. Protect it and you will be able to meet your financial needs.

If you were unable to work due to an accident, sickness or disability, do you have another source of income to provide for your financial needs? Would your income stop if you were unable to work for a prolonged period of time? If so, what would you and your family depend on? Your employee or social welfare entitlements may not last as long as you may expect them to.  If you are self-employed, you may have no illness benefit at all, unless you put this in place yourself in the form of Income Protection.

Income Protection

An Income Protection policy provides you with a replacement income, in the event you are unable to work due to an accident, sickness or disability, paying you up to 75% of your monthly income. This payment is paid after a deferred period, which is the waiting time between being unable to work and commencement of payment of the benefit, normally 26 weeks.  Benefits are then paid until either you can return to work, to the end of policy term (normally retirement age) if you are never able to go back, or death; whichever is sooner.

Why do I need Income Protection?
Income Protection is beneficial if your work or social welfare entitlements may not last as long as you may expect them to.  It is essential if you are self-employed and have no other form of unearned income, that you have Income Protection in place, as you may have no entitlement to social welfare benefit.

How much will it cost?

Cost is on an individual basis, mainly structured to the Deferred Period and your Occupational Class as well as the following:

  • Benefit (amount chosen – up to 75% of your gross income, less any other income, sick pay or welfare benefit)
  • Term (retirement age chosen)
  • Deferred period (8, 13, 26 or 52 weeks)
  • Occupation (Grouped into classes as some occupations are riskier than others effecting your premium costs)
  • Age
  • Gender
  • Smoker or Non Smoker
  • State of Health

Extra Optional Benefits will also add to the cost:

  • If Index Link option is chosen
  • If reviewable premium is chosen

Benefits:

Your benefit pays a regular monthly income after a deferred period if you are unable to work for a long period of time.  Tax-relief is refundable on your monthly premium at your marginal rate of tax; this is a great advantage to your premium costs.  The benefit is payable on any illness, accident or disability, with no exclusions apart from any pre-existing conditions or exclusions in relation to your own circumstances on implementation of your policy.  Optional indexation may be chosen, which allows the benefit (and premium) to increase each year in line with inflation.  The provider used by My Broker Insurances pay your premiums while paying a benefit during the claim period, so your payments are always up to date.

Deferred Period:

A period of 4, 8, 13, 26 or 52 weeks may be chosen, depending on how long an individual is paid by their employer while on sick leave. The longer the deferred period the lower the premium will be.

Guaranteed Premium:

The guaranteed premium option will ensure that your premium and benefit will not change during the term of the plan.

Occupation Class:

Categorised from Class 1 (non manual or office based) to Class 4 (manual work to high risk occupation), dependent on the risks involved. Cover that is arranged on an ‘any occupation’ basis is payable if the individual is unable to carry out any occupation which would be considered reasonable given their education and training. Cover arranged on an ‘own occupation’ basis is payable in the event that the individual is unable to carry out their normal occupation, and would carry a higher premium due to the restriction of work task that can be carried out to return to work.

Income Protection has been an under rated type of insurance due to the difficulty in qualifying to obtain this type of cover, and because of the restrictions on occupational class and claims.  However, this is a very beneficial policy, and one that certainly should not be overlooked when consideration to a quality annual income is currently enjoyed.

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