How much Income Protection I need?


Having Income Protection Insurance in place will allow you to protect a percentage of your income should you be unable to work due to illness or injury. The maximum percentage of your salary you can cover is 75%.

However, in some cases, it may not be necessary to cover the maximum allowable amount. Depending on your circumstances, a lower percentage may be sufficient.

This is where speaking to an advisor is important. When considering Income Protection, your whole financial situation must be considered.

We have written this guide to help you assess how much Income Protection you may need. If anything is unclear, please do not hesitate to contact our Income Protection team who can answer any questions you may have.

How does Income Protection Insurance work?

Income Protection Insurance works by paying out a percentage of your salary should you become unable to work due to sickness or injury.

You will have some decisions to make before taking out your policy. There are several factors that should be considered.

Percentage you can cover

With Income Protection Insurance, you have the ability to choose the percentage of your salary you would like to cover. The majority of people choose the maximum which is 75%.

However, you have the option to choose a lower percentage should you wish. The percentage you will depend on how much you require to still live comfortably.

Some people may have other sources of income and therefore may only need 50% of their salary covered.

You may also feel you could still cover your bills/living expenses on 50% of your salary.

Deferred periods

The deferred period is another major factor when considering an Income Protection policy.

The deferred period is the amount of time you have to be out of work due to injury or illness before your benefits are paid.

These periods differ in length and the period you choose will directly affect your premiums. There can often be significant differences in premium prices when comparing deferred periods.

Cover with a shorter deferred period will cost more than cover with a longer deferred period. Below is an example of your deferred period options:

Deferred Period Options

4 weeks

8 weeks

13 weeks

26 weeks

52 weeks

As an employee, it is also important to check if your employer offers sick pay. If they do then check for how long and how much you will be paid.

Knowing these facts will help you avoid any over insurance and ensure your deferred period start date coincides with your employer’s sick pay finishing.

Term of cover

Income Protection is different from some other policies which may have a term of cover as it will continue to pay out until retirement should you still be unable to work.

However, when taking out a policy you will be asked to specify what retirement age you would like the policy to run to.

This will likely range between ages 55-70. Again, your choice here will directly impact the cost of your premiums.

Level of cover

With your Income Protection policy, you will have the choice of the following cover:

  • Level

This means your policy will stay at a specific level for its duration.

  • Indexed

The indexation option means you will take inflation into account. It is a way of almost inflation-proofing your policy. The rate of the indexation is usually approximately 3%.

It will likely not have a dramatic impact on your premiums and is an option that should be strongly considered.


Income Protection will not apply should you be made redundant. It is a policy to cover you should you be unable to work due to sickness or injury.

what does income protection insurance cover

Do I need Income Protection Insurance?

Many people do not know they need Income Protection until it is too late. You may need Income Protection if you fall into any of the following categories:

  • You are self-employed and will have no source of income if you could not work due to illness or disability.
  • Your employer may pay your salary for a short period (days or weeks)
  • You have dependents who rely on your income.
  • You have no other source of income.
  • You do not have sufficient savings to replace your income and cover expenses.

There is support available such as the State illness benefit. However, this is limited to €208 per week. Most people would struggle to live off of €29 a day when mortgages, childcare, or even general living expenses are considered.

It is worth looking at a real example of someone with Income Protection vs someone without any cover in place.

Example 1 – This individual has an Income Protection policy covering 75% of their salary. The below benefits are paid monthly and include a reduction of the State illness benefit.


Percentage of salary covered

Benefits paid (minus State Benefits)




With an Income Protection policy in place, they will still receive €2,313 per month.

Example 2 – This individual does not have an Income Protection policy in place. They will rely on the State illness benefit which is €208 per week or €832 per month.


Percentage of salary covered

Benefits paid




In this example, the difference between having a policy in place compared to not having a policy was €1,501.

How much Income Protection do I need?

This will depend on your personal circumstance. The benefits you receive will at most cover 75% of your salary.

Therefore, how much you need will depend on your regular outgoings and cost of living. This will differ from person to person.

While some may be able to survive on 50% of their original salary, others may need a higher percentage.

It may be useful to make a list of your regular monthly expenses that would continue even if you were out of work. For most people these consist of:

  • Mortgage repayments
  • Utility bills
  • Food
  • Childcare
  • Loans
  • Car expenses
  • Insurance
  • Hobbies
  • Savings

Again, this list will vary and will be unique to your circumstances. Some people may not drive while some may not have children.

Monthly Outgoings Example

Light Bulb on Messenger 1.0 Case Study

Peter | 42 |

Income – €70,000

Monthly breakdown of outgoings with an Income Protection policy in place.

Spouse earns €30,000 per year. Approx €26,000 after tax.



Salary (75%) of €70,000


Spouse salary


Total income




















Total outgoings


Total income


Monthly breakdown


Important Note Paperclip on Apple iOS 8.3
In an effort to keep things simple, we have ignored childcare and some other substantial costs in the above example. However, not having a regular income will make such costs extremely difficult to afford. Other notable costs we have not included are:
  • Education
  • Holidays
  • Mobile/landline

Monthly breakdown of outgoings without an Income Protection policy in place.

State Illness Benefit€812
Spouse salary€2,166
Total income€2,369
Total outgoings€2,600
Total income€2,369
Monthly breakdown-€231 (deficit)

In many cases, Income Protection Insurance is quite affordable. Alternatively, you also have the option of covering a lower percentage of your salary in a bid to reduce your monthly premiums.

The above example illustrates how difficult it may be to cover living expenses without a regular income. Any premiums paid will also be eligible for tax relief. Taking time to assess your situation and put a plan in place may be one of the most important decisions you make.

Compare Income Protection Insurance

At emero, we compare Ireland’s leading Insurance providers.

How much Income Protection does a self-employed person need?

As a self-employed individual, you are more vulnerable from an income perspective than your average PAYE worker. You will likely not qualify for the State Illness benefit.

This means as a self-employed person, your income could be reduced to zero overnight in the case of an accident or illness.

The specific amount of Income Protection you require will depend on your circumstances. It is possible to protect 75% of your annual salary. However, in some cases, insuring a lower percentage may be sufficient.

Income Protection Insurance premiums also qualify for tax relief. This relief will be applied at your marginal rate and will significantly reduce the next cost of putting Income Protection in place.

We have created a page that focuses on self-employed Income Protection

How much Income Protection does an employee need?

As an employee unable to work due to sickness or injury, you may be entitled to the State Illness benefit. If you are under age 66 and meet the PRSI conditions, you will be entitled to €208 per week.

However, €208 will likely be a significant decrease from your current weekly wage. Therefore, having Income Protection Insurance in place can help bridge the gap in income.

It is also worth noting that the State Illness Benefit is paid for a maximum of two years.

In contrast, an Income Protection policy will continue to payout until you can either return to work or retire.
We have created a page that focuses employee Income Protection

How much does Income Protection Insurance cost?

The cost of your Income Protection policy will depend on a combination of factors. Although, some of these factors will have more of an impact than others.

  1. Occupation
  2. Percentage of Salary
  3. Smoker status
  4. Deferred Period
  5. Retirement age
Need more information? 📌

We have written an in-depth guide breaking down how much Income Protection Insurance costs and what factors may affect your premiums. Learn More

Why speak to our Income Protection team?

At emero, we specialise in Income Protection Insurance. Our team of Qualified Financial Advisers can discuss your options and answer any questions you may have.

There is no standard policy when it comes to Income Protection Insurance. There are many variables to be considered and each situation is different. It is important to take a wide overview of your financial situation.

From here, you can assess what course of action may be best. Also, in some cases, a lesser amount of cover may be adequate. The maximum amount you can insure is 75% of your salary but it may not be necessary.

Speaking to our team will help you decide how much cover will be sufficient for your situation.

We offer a complimentary consultation for anyone considering an Income Protection policy. Many clients prefer to start with an informal phone call. Here you can have questions answered and decide if you would like to proceed.

Key Takeaways

  • It is important to speak to an advisor before making any decisions regarding an Income Protection policy.
  • Relying on the State Illness Benefit of €208 per week is a risky strategy.
  • The full 75% of your income may not be required depending on your situation.
  • Income Protection will vary depending on if you are self-employed or an employee.
<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 

emero red icon
emero logo

Compare Ireland's leading Life Insurance companies in 60 seconds

Life insurance quote
Share this

Share this guide

Join 1,000+ subscribers who receive the latest news and insights.

By signing up you agree to our privacy policy

Scroll to Top

We're shortlisted for Protection Broker Expert of the year 2023 🏆