Income Protection
Income protection provides you with money each month if you are ill or injured and you are unable to work, until you can work again. You can use the money to pay your bills, or cover expenses you might build up around medical treatment. You can use it to keep doing the things that make you happy. However, you decide to use your money, it’s there to support you and your family so you can focus on getting better.
Why Income Protection Matters: Key Benefits for Workers in Ireland
Income protection is available to those in full-time employment or the self-employed. It protects you if you are out of work for long periods due to illness or disability; it does not cover you in the event of being made redundant.
Tax Relief on Premiums
One of the major benefits of income protection is the ability to claim tax relief on your premiums. You can deduct up to 10% of your total income spent on income protection from your earnings at your marginal tax rate. For example, if you pay tax at 41%, a €1,000 premium could effectively cost you just €590 after tax relief.
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Regular Income If You Can’t Work
If you're unable to work due to illness or injury, income protection kicks in after a set “deferred period” (usually between 8 and 52 weeks). It then provides regular payments, typically up to 75% of your earnings, until you're able to return to work, reach retirement age, or as outlined in the policy terms. Partial payments may also be available if you return to work part time.
Customisable and Long-Term Cover
Income protection policies are flexible, allowing you to choose the amount of cover based on your income (subject to maximum limits). The benefit can continue right up to age 60 or 65, offering long-term financial security. It’s especially valuable for those without extensive sick pay entitlements, but you’ll need to meet medical criteria to qualify, so early planning with a Financial Broker is recommended.