What Is Income Protection?

Income protection policy offers financial protection in the form of regular monthly income if the insured is unable to work due to an illness or injury. The assistance will be granted until the person can get back to work or until chosen retirement age, whichever comes first. This policy generally covers up to 75% of your earned annual income.

Financial safety net

Income protection cover will provide financial support to the policy holder when unable to work due to an illness or an injury.

Supports self-employed individuals too

Helps self-employed individuals maintain a stable financial position even when they can’t work due to illness/disability.

Choice of Deferral Periods

Policyholders can select a deferral period ( the term indicates minimum waiting period before an income is paid out) as per their choice; generally from 4 weeks to 52 weeks. Longer waiting period means less the premium in comparison.

Income protection

Do I need Income Protection Insurance?

When we consider taking any insurance, it is usually to protect something valuable to us, for example, our home, car, item of jewelry, etc. But what about our income? After all, it pays for everything!

Some questions to help you decide if you need Income Protection Insurance:
  • Income protection

    How valuable is your income to you and your family?

  • Income protection

    How would you and your dependents cope financially if you were to suffer an injury or illness and were unable to earn an income?

  • Income protection

    Would social welfare entitlements be enough to cover your monthly expenses in the event you are unable to earn an income for a longer period?

Income protection

Why Income Protection Insurance?

Income protection

Income Replacement

The premium pays you a regular taxable income up to a maximum of 75% of your earned income. This ensures you can continue to meet the financial commitments you have.

Income protection

Tax efficient

Premiums qualify for tax relief of 20% or 40% depending on your marginal tax rate. It makes premiums more affordable, but remember the claim will be taxable.

Income protection

Flexible Plans

  • Premiums and cover can be fixed. 
  • Most plans allow you to increase your cover every three years to keep up with salary increases.
  • Option to add indexation benefit to protect against inflation.

The cost of your income protection plan will depend on:

  • Income protection Your age
  • Income protection Your occupation & salary
  • Income protection Your overall health status
  • Income protection Type of benefit/cover chosen
  • Income protection Smoking Status
Income protection

How to Choose the Right Income Protection Cover in Ireland?

Below are a few things everyone should know while choosing an income protection cover in Ireland:

Age and medical history

An applicant in their 40's pays a relatively higher premium than a person in his/her 30’s. Income Protection has higher medical standards of entry hence medical history plays a significant part in acceptance of the policy.

Amount of premium and benefits

Guaranteed premiums – the amount you pay doesn’t change as long as your benefits stay the same. • Reviewable premiums – your premiums stay the same for the first five years of your plan. Insurance company review your premium on the fifth anniversary and could increase it, reduce it or keep it the same.

Cover Up

You can cover up to 75% of your earnings (excluding Benefit In Kinds) less State Illness Benefit( for PAYE employees). For Self Employed applicants there is no need to reduce the state illness benefit.

Deferred period

There is an initial waiting period – we call it the deferred period – at the start of your claim. This is how long it will be before the insurance company starts paying your income. You can choose how long this is: 1, 2, 3, 6 or 12 months (4, 8, 13, 26 or 52 weeks).

Guaranteed vs reviewable premiums

Users can choose either guaranteed premium option or reviewable rates. The latter may be less expensive initially, but will become more expensive over time. Our inhouse recommendation is for Guaranteed premium. Smoker status makes the income protection plan more expensive. For ex smokers, insurance companies in Ireland ask for a confirmation of minimum 12 months non smoker status.

Factors to Consider When Getting an Income Protection Policy in Ireland

With a wide range of income protection providers in Ireland, choosing the one that meets your criteria can be tricky.. We suggest you consider the following factors before taking a decision:

  • Get quotes from multiple insurers:

    We could help you get quotes from various providers, review them, and recommend the best income protection policy that offers the best coverage.

  • Read the small print:

    Always review the small print to understand conditions of the coverage, possible exclusions, and exactly what is covered.

  • Terms of premium:

    Understand the coverage requirement before choosing a policy. How you can maintain your current living standards if you get sick, and at what level must be considered while determining the term and coverage.

  • Understand how a financial broker can help:

    A reliable financial advisor would understand your needs and analyse the available options before choosing the best insurer for you.

  • Guaranteed insurability option:

    Guaranteed insurability option under an Income protection plan allows policy holders to increase the plan benefit every three years, to reflect their change in income/salary.

  • Keep your cover updated:

    It’s recommended that you pay the premiums as per the contract and ensure the cover remains up to date.

What Additional Benefits Can You Get?

Guaranteed increase option

Some insurers allow policyholders to increase your income benefit by 20% of your original amount without giving them new evidence of your health. They offer you this every three years subject to some terms.

Premium waiver

You won’t pay any premiums while the insurance company is paying you an income, but your plan will carry on as normal. This means if you return to work and need to claim again, you can.

Hospital benefit

If the insurer is hospitalised for more than a certain number of days and is unable to work, the plan will pay a portion of the annual benefit for every night subject to certain limits.

Occupation change

Your plan will continue if you change jobs, regardless of what you’ll be doing in your new job.

Back to work benefit

Income protection coverage offers additional support to policyholders when returning to work after being unemployed for an extended period, such as 12 months or more.


Is Income Protection Suitable for All People?

Our expert team of advisers can guide you in selecting plans that suit your needs.

Some occupations are automatically declined for income protection like high-risk jobs like Airline pilots, Members of defense forces, Train drivers, etc. We can guide you with alternate options in such a scenario.

In some circumstances, premiums could be prohibitory due to factors like age, smoker status, occupational class, and health situation. Our advisors will lay out all the details and also suggest alternate options in such cases.

With our expertise and knowledge in the medical underwriting process, we know which provider is more sympathetic, especially if you have a medical condition.


Read more:

  1. 1. What Makes Serious Illness Cover a Good Idea?
  2. 2. Who Requires Critical Illness Coverage and Serious Illness Coverage?
  3. 3. What Differentiates Accelerated Serious Illness Cover from Additional Serious Illness Cover?

At What Age Should I Get Income Protection Insurance in Ireland?

The earlier the better, is our norm.

Getting an income protection plan in the late 20’s and early 30’s makes the premium cost pretty affordable. People are usually much healthier at this stage, and medical exclusions in the policy are rare.

It may look like a younger person taking a policy will be paying the premiums for a longer duration. The comparison of actual cost with tax relief, indeed shows the the total cost of the plan is nearly the same or cheaper for a mid-20s individual when compared with a person entering the plan in mid 40s. Hence there is no actual monetary benefit in prolonging that decision to have income protection! In reality, the risks of not qualifying for a plan are greater in later life.


Read more:

  1. 1. Is Income Protection Suitable for All People?
  2. 2. What Makes Serious Illness Cover a Good Idea?
  3. 3. Who Requires Critical Illness Coverage and Serious Illness Coverage?


How does Income Protection Relate to My Profession?

According to the risk of injury or illness at work, insurers categorise you into different occupational classes.

For instance, a plumber is a class 4 (higher risk), whereas an accountant is a class 1 (lowest risk). The risk factor affects the cost of your premium too.

Most insurers also publish a Class 5 or Class D(Decline) occupational class. Jobs coming under this area are automatically declined for income protection. Some occupations like, Member of Defence forces, Fireman, Boxer, Garda, Bus Driver come under this category. However, don’t feel let down if you are in a declined class. We can discuss alternate protection options for you.


Read more:

  1. 1. At What Age Should I Get Income Protection Insurance in Ireland?
  2. 2. Is Income Protection Suitable for All People?
  3. 3. What Makes Serious Illness Cover a Good Idea?

How Helpful is Income Protection?

Your greatest asset is your income unless you are a millionaire already.

With your monthly salary, you cover your bills, living expenses,  your mortgage/rent, and everything else. Imagine living off social welfare alone? An income protection plan helps you maintain your lifestyle by giving you a monthly income if illness or injury prevents you from going to work. This plan takes away the financial burden, so you can concentrate on getting better.

At Financial Life, our expert Financial Planners help you choose the plan that suits your budget. We strongly believe that an income protection plan should form a  foundation for any financial planning.


Read more:

  1. 1. How Does Income Protection Relate to My Profession?
  2. 2. At What Age Should I Get Income Protection Insurance in Ireland?
  3. 3. Is Income Protection Suitable for All People?

We compare the market to get you the best quote

Bg image
Protection img

Mortgage Protection

Repays mortgage if the insured dies or suffers a terminal illness.

Learn More Get Quote
Protection img

Life Insurance

Ensures the financial stability of the family if the insured dies.

Learn More Get Quote
Protection img

Life & Serious Illness cover

The insurance plan gives coverage against specific diseases.

Learn More Get Quote
Protection img

Income Protection

Ensures a regular income for the insured who is unable to work.

Learn More Get Quote
Protection img

Whole of Life cover

If you are looking for a life cover plan with a guaranteed payout then a Whole Of Life Cover Plan is just for you.

Learn More Get Quote