What is it?
Income Protection pays you a regular income if you can’t work because of sickness or disability and continues until you return to paid work, retire or die. It does not cover redundancy. Income Protection is also referred to as Income Continuance, Salary Protection or Permanent Health Insurance but it is not the same as Private Health Insurance. To have income protection cover you must be in paid work or be self-employed.
You are allowed to receive a benefit of 75% of your pre disability gross income including state benefits or any other payments.
Why you need it?
Over the last few years, workers have started to realise just how important their income is. Your Income is your most important asset as it pays for everything! Income Protection is the protection of the asset that pays for and protects all your other assets.
You will need Income Protection if:
You are self-employed and would have no source of income if you couldn’t work due to illness or disability
You have little or no sick pay from your employer
You have no ill-health pension protection
You have dependants who rely on your income
You have no other source of income or money
Benefits you may be entitled to would not be enough to replace your lost income and/or cover your normal expenses.
Public Sector sick pay entitlements
The public sector sick pay entitlements changed in 2014. For most public sector employees the changes came into effect from April 1st 2014 and for employees in education from September 1st 2014. Permanent employees in the public sector are paid a full salary for 13 weeks followed by 13 weeks of half pay. This is subject to a maximum of 26 weeks in a rolling 4-year period. The only exception is in the case of critical illness where paid sick leave will be paid at 26 weeks at full pay followed by 26 weeks at half pay over the same 4 year rolling period.
If you need to take sick leave, two ‘look back periods’ are reviewed; The first is to determine whether you receive sick pay or not. If your previous paid sick leave does not exceed the allowed 26 weeks in the previous 4 year period then you may be entitled to sick pay. However if your previous paid sick leave exceeds the 26-week period then you will not be entitled to pay.
The second look back period will review the twelve months prior to the current date. This will determine whether full or half sick pay will be paid.
Once sick pay entitlements expire you may be entitled to claim a Disability Benefit or Invalidity Pension from the Department of Social Welfare providing you are an A1 PRSI worker. Depending on length of service history you may also qualify for Temporary Rehabilitation Remuneration and provided you can prove that you will never work again, an Ill Health Early Retirement Pension from your employer. In both instances your income will be significantly lower than your pre-illness salary.
Salary protection or income continuance policies are designed to protect against such a sharp drop in income and cause financial worries at a time when your focus will more than likely be on your health.
In a lot of cases, especially Public Sector workers, the main thing that can jeopardise you from earning a living is if you cannot work due to ill health. That is why people are choosing to protect their main asset.
How Rockcourt can help?
As an insurance intermediary we have an agency with all the insurance companies (below). We can provide a fair analysis of the market on your behalf enabling us to find you the greatest level of benefit for the lowest cost. Our quotes are the same, and sometimes better, than going direct.
With Income Protection, expert advice is a necessity as it is important to figure out the correct benefit amount that is to be insured. Without correct advice people may end up over insured and paying the insurance company a premium for a benefit that cannot be fully paid out on claim due to legislation restrictions. In other words “over-insured!”