What is the difference between Income Protection & Specified Illness Cover?

Income Protection and Specified Serious Illness Cover are two very different types of personal protection insurance.

The easiest way to tell them apart is that one provides a consistent, long-term monthly payment while the other provides a one-time lump sum payout.

Income Protection, also known as salary protection, pays out a monthly benefit that replaces part of your income should you be unable to work due to illness, injury, or disability. 

Specified Illness Cover pays out a lump sum should you be diagnosed with one of the illnesses outlined in your policy.

income protection vs specified illness cover emero

We are frequently asked which policy is the best. The “best” insurance plan is the one that best satisfies your specific needs.

When choosing, it’s important to consider factors such as your age, health, wealth, and employment status to name a few.

Ideally, it wouldn’t be a case of one or the other as most people would benefit from having both policies in place.

But there is a cost to be incurred for this. Below, we compare the two insurances, outline what they each cover, and examine potential monthly premiums.

Comparing both sides by side should help you understand and decide which may be more beneficial.

However, before we start, it may be helpful to give a 60-second snapshot of how Income Protection and Specified Serious Illness differ

Income Protection vs Specified Illness | Quick Summary

  • Income Protection will provide you with a long-term, monthly income payment.
  • Specified Serious Illness Cover pays out a once-off, tax-free lump sum.
  • Income Protection will pay out once you are unable to work due to any illness, sickness or disability.
  • Specified Serious Illness Cover pays out only on the diagnosis of an illness outlined in your policy.
  • Comparing both using factors such as price should be avoided. You should seek advice to ensure you choose the correct cover for your specific needs.

The most important differences between Income Protection and Specified Serious Illness Cover

Below we highlight both policies and assess some of the important differences between each.

Income Protection - What does it cover?

  • Any illness, injury or disability that prevents you from working.
  • Mental health and stress are both covered.
  • If needed, Income Protection will be paid long-term. Either until you are fit to return to work or reach retirement age (The average Income Protection claim is five years)
  • You will be eligible for tax relief on your income protection premiums at your marginal rate.
  • You can claim on an Income Protection policy as many times as you need. Your policy will remain in place even after a claim once you continue to pay your premiums.

Specified Serious Illness Cover - What does it cover?

  • Only covers illnesses specifically outlined in your policy terms.
  • In some cases, you will need a diagnosis of a certain severity to be eligible for a claim.
  • Specified Illness pays out a once-off lump sum in the event of a successful claim.
  • Tax relief is not available on premiums.
  • The plan will cease once a claim has been made.
The information above should help to clarify things and show how the two policies differ.
However, it could be beneficial to compare both using a few key factors side by side.


Income Protection

Serious Illness Cover

Benefit Provided

A regular income (monthly)

A once off lump sum


Income tax relief on premiums (20% or40%)

No income tax relief on premiums

When is the benefit paid

Benefits are paid on inability to work due to illness, injury or disability

Payable on confirmed medical diagnosis of illness outlined in the policy


Only those with an earned income

Not restricted to those with an earned income


Cost will vary depending on occupation and other factors

Accelerated is cheaper than standalone cover

Price Comparison - Income Protection vs Serious Illness Cover

Price is often a concern as we compare anything in life. Insurance policies are no different.

Although price shouldn’t be the deciding factor, it will likely place a significant role in your decision-making process.

For the purpose of this comparison, we looked at a 38-year-old, male, non-smoker. They need €60,000 cover and both policies will run until age 65.

Of course, this is a little bit of apples and oranges. Income Protection could potentially pay out for 20+ years whereas Specified Illness Cover is a once-off.

Therefore, the total payment values could be drastically different.

However, we’ll look at both below and assess the difference in potential premiums.

The below Income Protection quote assumes a deferred period of 26 weeks, 40% tax relief, and a Class 1 occupation.

Comparison Table


€60,000 Specified Illness Cover

€60,000 (per year) Income Protection

Monthly Premium


€79.29 (after tax relief)

Total Potential Payout



 The table above highlights a very important difference between the two policy types.

While Specified Illness Cover is a once-off payment, Income Protection could potentially continually pay out over a longer period of time.

It is for this reason that it is extremely cost-effective. Aviva’s statistics show that the average Income Protection claim is five years.

If we apply this to our example above, the total Income Protection pay out is €300,000. Still significantly higher than the Specified Illness Cover.

average income protection claim

Income Protection vs Specified Illness Cover: Which should I choose?

The million-dollar question. Unfortunately, these situations are rarely straightforward.

As we said before, ideally it wouldn’t be one or the other.

In most cases, a combination of both would be ideal. Although the cost may be a prohibiting factor

However, you could look at taking a lower amount of each. Perhaps enough Income Protection to cover your mortgage and other essential expenses.

Instead of €60,000 per year, maybe €40,000 would be enough. This would drop your premium from €79.26 to €56.16.

You could also look at reducing the Specified Illness Cover from €60,000 to €35,000.

This would save you another €22.46 per month.

Cost of taking out both Income Protection & Specified Illness Cover

As we touched on earlier, most people would ideally have both covers in place. Even if it’s at a reduced rate.

Below we compare the total cost of our original quotes with that of reduced cover. It is worth noting that the reduced cover should be accurately calculated with the assistance of your advisor.

Cost of Original Cover


€60,000 Specified Illness

€60,000 per annum – Income Protection

Total Cost

Monthly Cost


€79.29 (after tax relief)


Cost of reduced Income Protection & Specified Illness Cover -h3


€35,000 Specified Illness

€40,000 per annum – Income Protection

Total Cost

Monthly Cost


€56.16 (after tax relief)


As we’d expect, a drop in the amount of cover has resulted in a drop in the cost of your monthly premiums.

Full Cover


Reduced Cover




Why seeking advice is important

 Hopefully, this guide has helped you understand some of the key differences between the policies.

However, you should still avoid jumping into making a decision. Your cover requirements will be specific to your personal circumstances.

If you’re unsure or want to chat about what cover is most suitable for you, feel free to contact our team.

We have helped countless people in similar positions and would be happy to answer any questions you may have.

You can contact myself or the team via phone or email. It’s usually best to arrange a quick call to assess your situation and see what options are available.

In the meantime, we have plenty of other resources available in this area which may also be helpful.

Looking forward to hearing from you!

Chat soon,


<b>Ian Kennedy QFA</b> <br>Senior Insurance Advisor</br>
Ian Kennedy QFA
Senior Insurance Advisor

Ian is one of our Senior Financial Advisors at emero and has worked within the financial sector for the past five years. If you would like to chat with Ian directly, please get in touch with him at 

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[email protected]


01 9630436

In-Person Meeting

Contact via phone or email

Video Call

Contact via phone or email

Providing specialised advice.

Phone: 01 584 4280

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