Protect your Income

Your Income is your biggest asset, if you were unable to work how long would you be able to maintain your lifestyle and pay your bills?

Income protection is a product that is sold by Life Assurance companies that promises to pay you a replacement income in the event of you being unable to work due to accident, illness or injury.

You can cover up to 75% of your income, less any social welfare illness benefit should you be entitled to it. The payment will continue until such a time as you are able to return to work or until your chosen retirement age.

You will be able to chose a 'defferal period' when you take your policy out, this is the length of time that you must be absent from work before the benefits kick in, the longer the deferral period, the cheaper the premium you will pay. Self employed people should ideally chose the shortest deferral period. When setting the premium, the life company will take the nature of employment into account, office workers are low risk, working on a building site is high risk etc.

Look at your contract of employment to see what, if any, sickness pay you may be entitled to receive from your employer before choosing a deferral period.

This type of insurance will not cover you for unemployment or redundancy and is really designed for longer term illnesses. The good news is that you are entitled to tax relief on your premium at your marginal rate of tax, this makes this form of cover even more attractive.

FS