Income protection insurance is a crucial safety net for individuals who find themselves unable to work due to illness or injury. This type of insurance ensures that you continue to receive a regular income until you can return to work or retire.
Yourbroker.ie recently added a complete guide to income protection which is an excellent resource providing an overview of the key points to consider when exploring income protection insurance. Whether you’re employed, self-employed, or a key executive, understanding the ins and outs of income protection can make a significant difference in securing your financial future.
The guide covers the following topics.
How Does Income Protection Work?
Income protection policies are designed to pay out a percentage of your gross salary, typically between 50-70%, in the event you are unable to work. Payments begin after a pre-agreed waiting period and continue until you can return to work, reach retirement, or the policy term ends.
Tax Relief on Income Protection Premiums
One of the benefits of income protection insurance is that you may be eligible for tax relief on your premiums at your marginal rate of tax. This can make the cost of premiums more affordable as you can claim back a portion of the cost from the government.
Choosing the Right Income Protection
Selecting the right income protection involves considering factors such as the deferral period, the percentage of your salary you wish to cover, and the policy term. It’s important to assess your financial situation and how long you could manage without an income before benefits kick in.
Determining Your Income Protection Payout Amount
Your payout amount is influenced by your salary at the time of taking out the policy, the level of coverage you choose, and any other income protection policies you may have. Ensure that the payout amount is sufficient to cover your essential expenses.
Finding the Best and Cheapest Income Protection Insurance
To find the best and most affordable income protection insurance, it’s advisable to compare quotes from different insurers. Consider the coverage details, the insurer’s reputation, and the claims process. Sometimes, the cheapest option may not always offer the best coverage.
Income Protection for Self-Employed Individuals
Self-employed individuals can greatly benefit from income protection insurance as they may not have the same safety nets as employed individuals. Policies can be tailored to suit the fluctuating incomes typical of self-employment.
What is Executive Income Protection?
Executive income protection is a policy taken out by a company to insure against the loss of income of their key employees. It pays out a monthly benefit to the company, which can then be used to pay the insured individual’s salary.
Income Protection vs Critical Illness Cover
While both income protection and critical illness cover provide financial support, they serve different purposes. Income protection offers a regular income, whereas critical illness cover provides a lump sum if you’re diagnosed with a specific illness.
For a complete guide to income protection insurance, including detailed explanations of the topics covered above, visit YourBroker.ie Comprehensive Guide to Income Protection Insurance.
