What is it?
Income protection insurance provides you with the safety net of a replacement income if you are unable to work because of an illness, disability, injury or accident. It can replace up to 75% of your income, less any entitlements to social welfare, and is payable until you are deemed fit to return to work or until the end of the policy term.
Why do you need it?
If you are unable work due to illness or injury you will still have to pay your regular bills, your mortgage and your loan repayments. You may also face the added burden of medical expenses.
Who can get it?
You can take out income protection if you are in paid employment or you are self-employed and earn an income. It is especially important for those who are not entitled to illness benefit. Income protection is available as either a personal or employer plan.
Factors Affecting Cost
Some occupations will not be eligible for cover while others will attract higher premiums.
The younger you are the cheaper the cover.
Your general state of health
The better your health the more likely you are to get cover. Having an illness doesn’t necessarily preclude you from getting cover – although it may increase the price or result in exclusions.
Whether you smoke
If you smoke the cost of your cover nearly doubles. If you have given up tobacco related products in the last 12 months you should always look at the price you are currently paying.
Your family’s health history
Poor history of family health could lead to either more expensive cover or maybe not getting cover at all.
Level of income you want to insure
The more cover the more expensive it becomes.
Number of years you require cover for
The longer the term the more expensive the cost.
Amount of time you must be off work before the insurance kicks in, this could be 4, 8, 13, 26 or 52 weeks.