What is income protection insurance?
Income protection is an insurance policy that offers financial support after a set term.
It works by covering part of your salary when you’re unable to do your job through sickness or injury.
What is the deferred period?
It’s the waiting time from when you’re first off work to when the policy starts paying out.
You can set a deferred period from between 4 to 52 weeks, the longer the delay, the cheaper your cover will be.
To choose the right term, you should check your company sick pay entitlement and work out how long you could manage your bills without extra support.
Who can get income protection in Ireland?
To qualify for an income protection policy, you need to be either:
- Employed for over 16 hours a week
- Self employed
You must also be within the age limits for the policy start and end date. Cover can start between 18 and 59 and go up until you reach 70 with some providers.
What else affects eligibility?
The job you do can affect whether or not you’re eligible for income protection.
Each occupation type is given a class rating from 1 to 5. Class 1 jobs e.g. accountants carry the lowest risk in relation to sickness or injury so the monthly premiums will be lower.
Class 5 jobs e.g. prison officers and tradespeople are deemed the most risky, and can result in very high premiums, or being refused insurance.
You can find out more about classes of jobs on the CCPC website.
Types of salary protection
Personal plans are designed and paid for by an individual, while group or executive plans are organised by an employer.
Additionally, you’ll need to choose between Guaranteed premiums or Reviewable premiums.
A guaranteed protection policy
This offers you peace of mind that your payments will stay the same throughout your policy.
This can make budgeting easier as there’ll be no nasty surprises down the line.
You may initially pay more than with a reviewable policy, but over time, it’s likely to be the cheaper option.
A reviewable protection policy
With this type of policy, your payments may change over time.
Your insurer will periodically review your payments for reasons like your age, and may decide to increase them.
This gives you less control over the total cost you’ll pay over the term, although your payments may initially be lower than with a guaranteed plan.
You may be given the option of reducing your cover or removing extra benefits in order to maintain your current premium..
Critical illness cover
Income protection insurance FAQS
Can I get back any of the premiums I’ve paid?
No, it isn’t a savings plan so you can’t cash your premiums in.
You must also maintain your payments for as long as you need protection. If you stop paying your premiums, you won’t be eligible to claim.
What happens if I can't get income protection insurance?
If you have a high risk job e.g. manual work that means you can’t get an income protection policy, there is a cheaper alternative that works in the same way called Wage Protector.
The period you can claim for may have restrictions and terms attached so check the small print before you sign up.
What happens if I change jobs?
It depends on the insurance provider and policy you’ve taken out. In some cases it doesn’t affect your premiums or the cover you would get in a claim.
However, you should check your policy details and then contact your insurer if you’re still unsure.
Letting your insurer know about your new job will ensure you’re still covered in the event of a claim, even if this means paying a higher premium.
When can I cancel my income protection policy?
You can cancel at any time but your benefit will cease immediately, meaning that you won’t be eligible to claim if you then become unwell.
You should think carefully before stopping your policy because you’ll almost certainly have to pay a higher premium in the future due to your age or any health conditions you might develop.
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