emero Insurance Aims To Demystify Income Protection Cover
At emero Insurance, we understand that for most people, your earned income is often your most important asset.
It’s why we have written so many guides across our website. We want to bridge the current knowledge gap and ensure people protect themselves and their families.
Business Plus covers all areas of business news and is Ireland’s foremost specialist business publication.
Our article focused on our mission to demystify Income Protection Cover.
At emero Insurance, our goal is to make putting the correct cover in place as uncomplicated as possible.
Articles such as this will assist us in achieving this goal.
How does Income Protection work?
Income Protection insurance allows you to ensure up to 75% of your salary should you be unable to work due to any illness, injury, or disability.
The policy will continue to pay out until you can either return to work or reach retirement age.
This long-term commitment to pay a percentage of your salary means Income Protection provides significant value.
Notable quotes from the article
“Income Protection is the cornerstone of financial planning and has risen to the surface as a leading concern amongst our customer base, accelerated even more since the pandemic,” said Hanway.
“Consumers are familiar with the fundamental benefits of income protection related to serious illness and injury. However, the lack of education and the stark reality in the face of income loss is enormous.
The above quotes from our Co-Founder, Alan, highlight the importance of Income Protection.
Many people do not realise how financially vulnerable they are. According to the CSO, the average wage in Ireland is approximately €46,800.
This means many people could face a drop of €36,000 per year should they go from their salary to the State Illness Benefit of approximately €11,000 per year (depending on salary).
How much does Income Protection cost?
The cost of your Income Protection premium will vary significantly depending on certain factors with the main variable being your occupation.
Class 1 is seen as the lowest risk and includes occupations such as accountants and any roles admin based on no manual labour. Class 4 occupations are seen as higher risk and often include trades such as carpenters and plumbers.
Other factors that will affect the cost of an IP premium include age, smoker status, health, sum assured, deferred period, and chosen retirement age.
Examples of Income Protection Premiums
Below we look at some examples of what premiums you may expect to pay.
All quotes below are for a Class 1 occupation where the applicant is a non-smoker. The deferred period is 26 weeks and cover runs until a retirement age of 65.
You’ll see from the below tables how premiums increase significantly in line with age. It illustrates how important it is to get cover in place as early as possible.
What should I do next?
The first step is to take stock of your situation. Sick pay is not a long-term solution.
If you’re the main earner in the household, it’s important you put some level of protection in place.
The maximum percentage of salary you can cover is 75%. However, it may be sufficient to cover a lesser amount.
This will reduce the cost of your monthly premium but perhaps still allow you to cover essential outgoings such as your mortgage.
Income Protection is the gold standard of insurance policies and if possible, it’s something you should consider having in place.
If you are interested in potentially putting cover in place, you are welcome to contact me or a member of our team.
We can help you assess your eligibility and answer any questions you may have.
For most of us, our earned income is our most important asset and should be treated as such.
Ian is the Client Services Director at emero Insurance 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 [email protected]