Income Protection for Employees
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Why should you consider Income Protection Insurance?
For many of us, our income is our most important asset. Without an income, everything becomes more difficult.
If it was removed, would you be capable of paying rent, mortgage, or even basic living expenses?
Having an Income Protection Insurance policy in place allows you to protect a percentage of your income. The benefit will be paid should you be unable to work due to illness or injury.
Putting Income Protection Insurance in place will give you peace of mind that you will still be financially stable should something untoward happen.
If you are unsure about whether you need Income Protection, here are some questions to ask yourself:
The first port of call is to check your contract of employment. In some cases, you may be entitled to full pay while out due to sickness or injury for a certain period of time.
If you are entitled to sick leave, it is important to find out exactly how long you are covered.
Even the most generous of employers may only offer paid sick leave for a number of months. In these cases, you could choose a longer deferred period and have your own Income Protection policy kick in as your employer stops your paid leave.
Even if you had significant savings built up, they would likely reduce quickly without a salary.
According to the Central Statistics Office (CSO) latest figures, the average wage in Ireland is approximately €2,884 take-home per month.
This means even savings of €17,000 upwards would only cover 6 months’ salary.
Do not fall into the trap of thinking your savings will be sufficient should you be unable to earn an income.
By combining the answers to the above questions, you will be able to self-assess whether Income Protection may be required.
Tip 📌
Do not assume your employer will pay you if you are unable to work. In some cases, they may pay you for a short period of time. However, check your contract of employment.
Will the State provide you with sick pay?
Yes. However, the State Illness Benefit is a modest €208 per week. There are also limitations as to how long this benefit can be paid for.
The maximum is two years and this will be dependent on how many social insurance contributions you have accumulated.
With Income Protection Insurance, it will pay out for as long as you are unable to work or until you reach the retirement age agreed in your policy.
Why it may be difficult to rely on the State Illness Benefit?
Income Protection allows you to insure a certain percentage of your salary up to a maximum of 75%. In this example, we compare an individual who insures 60% of their €70,000 annual salary.
This would give a total of €42,000. We also assume this individual is entitled to the max State Illness benefit of €208 per week or €10,816 per year.
Annual Salary | Percentage of salary protected – 60% | State Illness Benefit | Amount to be insured |
€70,000 | €42,000 | €10,816 | €31,184 |
Monthly Benefit
| With Income Protection | Without Income Protection |
| €2,598 | €832 |
| The difference in monthly income | €1,766 |
Benefits of Income Protection Insurance
None of us are immune from falling ill. Thankfully, more and more people are realising the importance of Income Protection.
Long-term cover
None of us are immune from falling ill. Thankfully, more and more people are realising the importance of Income Protection.
Tax efficient
None of us are immune from falling ill. Thankfully, more and more people are realising the importance of Income Protection.
Monthly payments
None of us are immune from falling ill. Thankfully, more and more people are realising the importance of Income Protection.
Occupations where Income Protection is most popular
Income Protection has risen in popularity in recent years. More and more people are realising the importance of protecting their income.
Software Engineer
Recruitment
Accountants
Data Scientist
Sales Representatives
Business Development
Project Manager
Quantity Surveyors
Pharmacist
Project Manager
Quantity Surveyors
Pharmacist
Software Engineer
Recruitment
Accountants
Data Scientist
Business Development
Sales Representatives
Income Protection Insurance is not industry-specific. Your need for Income Protection insurance will depend on what benefits you have available. Check your contract of employment for specific details.
Did You Know 📌
There are 4 different occupation classes that affect Income Protection eligibility. Class 1 is seen as the lowest risk, with class 4 seen as the highest risk. Learn More
How much does Income Protection cover cost?
Below we look at examples of the cost of Income Protection for occupations that are often self-employed or contractors.
We will assume all examples would like to protect 75% of their income which is the maximum allowable.
Age | Occupation | Class (1-4) | Salary | Premium (after tax relief) |
35 | IT Consultant | 1 | €70,000 | €40.02 |
35 | Dentist | 2 | €70,000 | €55.29 |
40 | IT Consultant | 1 | €70,000 | €52.09 |
40 | Dentist | 2 | €70,000 | €72.19 |
Assumptions
- Non-smoker
- Deferred period of 26 weeks
- Retirement age 65
- Chose guaranteed Income Protection
Assumptions:
- Non-smoker
- Deferred period of 26 weeks
- Retirement age 65
- chose guaranteed Income Protection
It is worth noting that smoking can have a significant impact on your premiums. In some cases they may increase by up to 50%.
How emero can help you get Income Protection Insurance
We can help you get covered in 3 easy steps.
1.
Calculate the cover required
Calculating the appropriate level of cover needed for your situation is the first step. A quick assessment will allow us to assess your situation and determine the correct cover you will need.
2.
Search the market
At emero, we have access to all of Ireland’s largest life insurance companies. This gives us the ability to compare the entire market and allows you to ensure you get the best possible quote.
3.
Protect your Income
The final step is to put cover in place and ensure that your income is protected. From here our team will liaise with you and move through the final steps before receiving your documentation.
1.
Calculate the cover required
Calculating the appropriate level of cover needed for your situation is the first step. A quick assessment will allow us to assess your situation and determine the correct cover you will need.
2.
Search the market
At emero, we have access to all of Ireland’s largest life insurance companies. This gives us the ability to compare the entire market and allows you to ensure you get the best possible quote.
3.
Protect your Income
The final step is to put cover in place and ensure that your income is protected. From here our team will liaise with you and move through the final steps before receiving your documentation.
Income Protection Quotation
