What does Income Protection cover?


Income Protection Insurance will pay you a monthly benefit should you be unable to work due to illness or injury.

Should this be the case and you are unable to do your job, it will likely be a stressful period in your life.

Income Protection Insurance will lessen the financial burden and will pay you a percentage of your income until you are either able to return to work or reach retirement age in your policy.

The maximum amount of your income you can insure is 75%. However, in some cases, a lesser percentage of your income may be sufficient.

what does income protection cover

What does Income Protection Insurance cover ?

Income Protection Insurance will cover all illnesses and injuries.

As opposed to Specified Illness Cover, an Income Protection policy will cover any and all illnesses, injury, or disability that prevents you from doing your job.

The causes can range from cancer to depression. Once it is stopping you from doing your job, Income Protection will cover it.

what does income protection insurance cover

What does Income Protection Insurance not cover?

There are certain exclusions within an Income Protection policy.

It is also worth noting that these exclusions differ depending on your provider.

Redundancy is not covered by Income Protection Insurance. Other examples of exclusions are:

  • Any pre-existing medical conditions that were diagnosed before the policy started
  • Self-inflicted injuries
  • Pregnancy
  • Alcohol or drug abuse
  • Failure to follow medical advice
Looking to assess your eligibility for Income Protection? 📌

Income Protection for:

How much Income Protection Insurance was paid out in 2021?

Overall, approximately 90% of Income Protection Insurance claims are paid. Claims are usually only declined when an applicant has not been truthful in the application process or has not disclosed a change in circumstances. 

In 2021 alone, approximately €70 million was paid out in Income Protection claims.

Income Protection Claims 2021
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If you have used emero to take out the Income Protection policy and have had a change in circumstance, please contact our team.

What are the top causes for an Income Protection claim?

Claim statistics will vary slightly depending on the life insurance company. However, below we’ve outlined Aviva’s top medical reasons for claims in 2021.
  • Psychological
  • Orthopaedic
  • Cancer
  • Neurological
  • Cardiac
  • Respiratory
  • Other

Compare Income Protection Insurance

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

Income Protection Insurance vs Specified Illness Cover

Income Protection and Specified Illness Cover have some very important differences.

Specified Illness Cover pays out a once-off lump sum whereas Income Protection will pay a monthly benefit until you can either return to work or retire.

Main points when considering Income Protection Insurance

  • It will cover any illness or injury that prevents you from doing your job.
  • Mental health and stress will be covered.
  • You will be paid a percentage of your income until you are fit to return to work or reach the retirement age agreed in your policy.
  • Premiums are eligible for tax relief at your marginal rate.

Main points when considering Specified Illness Cover

  • It will only cover the specific illnesses outlined in your policy.
  • Payment will be in the form of a lump sum rather than a regular monthly benefit.
  • Tax relief is not available on premiums.
  • The plan will be stopped once a claim has been made.
Need more information? 📌

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

Why is Income Protection Insurance a better option?

The fact that Income Protection will pay out once you are unable to work due to any illness is the biggest factor.

The longevity of an Income Protection claim is also a major benefit. It will continue to cover you should you be out of work long-term. The average Income Protection claim is approximately five years.

A long-term illness or disability could mean financial hardship. However, having Income Protection in place will provide peace of mind and financial security.

If you can afford the higher premiums, Income Protection should always be chosen over Specified Illness Cover.

Key Takeaways

  • Income Protection Insurance will provide cover for any injury, illness or disability.
  • Redundancy is not covered and pre-existing medical conditions may be excluded.
  • On average, approximately 90% of claims are paid out.
  • Income Protection Insurance is recommended over Specified Illness Cover where possible.
<b>Eoin Cullen BBS Msc QFA Grad. Dip CFP ®</b></br>Director
Eoin Cullen BBS Msc QFA Grad. Dip CFP ®

Eoin is a Certified Financial Planner  CFP® who has been providing advice to his clients for over 16 year’s having held senior advisory positions in some of Ireland’s well known financial companies.

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