This website uses cookies to ensure you get the best experience on our website.
To learn more about our privacy policy Click hereA refresher: income protection pays up to 75 per cent of your salary if you can’t work for any reason – either until you can go back to work or you retire and unlock your pension fund.
Income protection Ireland has a ‘clause’, if you will, called the deferral period. This period states how long you have to be out of work before your insurance kicks in. The deferral period is one of 4, 8, 13, 26, or 52 weeks. The shorter options are more expensive, while a 52-week deferral period would be considerably cheaper.
However, you have to be realistic here. Could you survive 52 weeks with no income?
To give you a quick example, let’s say you earn €50,000. Your deferral period is 13 weeks. You get hit by a car on the way to work. It’s terrible and awful, but you survive, thank God or Odin or Lady Gaga.
After the 13th week, your payment kicks in to save the day. And pays your rent and bills and all that other life stuff.
What does that look like in cold, hard numbers on the suggested salary of €50,000?
75% x €50,000 = €37,500.
€37,500 – €10,556 (State Illness Benefit) = €26,464.
Once cover kicks in, the insurer will pay you €2,288 a month until you can go back to work.
An extra fun fact, the average income protection claim in Ireland is about five years. If you were out of work for five years, that’s €2,288 x 60 = €137,280.
You can see how massive a difference that would make—basically, financial ruin or not. Little Johnny would be delighted that Mammy bought that income protection plan.
Vsit For Income protection Insurance