| Income Protection is a protection policy that will pay | | | | starts to receive his payment after 26 weeks, which is |
| out a regular cash payment, replacing part of your lost | | | | his deferred period. Joe must tell his insurance |
| income if you have a long-term illness or disability and | | | | company what other benefits he is getting while he is |
| you are unable to work. Income Protection is also | | | | out of work. These are a social welfare disability |
| sometimes referred to as Permanent Health Insurance, | | | | benefit of EUR800 a month. |
| but it must be stressed that Income Protection is not | | | | Example: Monthly Benefit for Joe as an employee |
| the same as a private health-care plan. e.g. private | | | | Insured benefit - EUR a month |
| health-care plans help pay for the costs of your | | | | 75% x EUR40,000 a year = EUR30,000 - EUR2,500 |
| treatment, they do not pay out any extra cash benefit. | | | | Less social welfare a month - EUR800 |
| While it is the case that like a pension people put it on | | | | Maximum benefit a month from the insurer - EUR1,700 |
| the long finger it is vital that one has some protection | | | | Who Can Buy Income Protection? |
| against loss of income. The recent global recession | | | | You must be in full-time paid work or be self-employed |
| has made this point abundantly clear. | | | | to take out and continue to have cover. |
| Do I Need Income Protection? | | | | What Tax Benefits Do I Receive on Income Protection |
| If you become seriously ill you may be entitled to social | | | | Premiums? |
| welfare payments, sick pay or a level of income under | | | | Tax Relief is available on your Premiums at your |
| your employers pension plan. If income from these | | | | marginal rate of tax. |
| sources is sufficient for your needs then you may not | | | | When Would I Receive The Benefit? |
| need extra cover from an income protection policy. | | | | You get your benefit only after you have been unable |
| However, you may need this cover if: | | | | to work at your normal job and are not working at any |
| - You are self-employed; | | | | other job for a set period. This period is called the |
| - You would get little or no sick pay from your | | | | deferred period. You can choose from 13 weeks, 26 |
| employer; or | | | | weeks or 52 weeks. If you choose 13 weeks it costs |
| - You have no ill-health pension protection. | | | | more than for 26 or 52 weeks because your benefit |
| How Much Would I receive from my Protection | | | | starts sooner. |
| Policy? | | | | How Long Would I Continue to Receive Income |
| You get a proportion of your earnings (75% up to | | | | Protection Benefit? |
| EUR80,000), less any other social welfare payments | | | | Your insurer will usually stop paying your benefit as |
| you receive when you are out of work (such as sick | | | | soon as one of the following events happens: |
| pay or social welfare disability benefit). | | | | - you return to work; |
| Example: Joe is an employee earning EUR40,000 a | | | | - you reach the end of the policy term, which could be |
| year. He has an income protection policy that will pay | | | | your 55th, 60th or 65th birthday, dependingon the |
| up to a maximum of 75% of the amount he was | | | | policy; |
| earning before he became unable to work, less any | | | | - the insurers medical officer, who may check your |
| other income he is receiving. | | | | medical condition from time to time, decides thatyou |
| Joe has recently become unable to work because of | | | | are fit to return to work; or you die. |
| illness. He puts in a claim to his insurance company and | | | | |