Income Protection Insurance in Ireland is designed to replace part of your income if you are unable to work due to illness or injury. Income protection insurance provides up to 75% of your pre-tax income. It’s usually paid monthly and continues until you can return to work, retire, or reach the end of the policy term (which is often up to age 65).
Deferred Period:
You can select a waiting period (usually 4, 8, 13, 26, or 52 weeks) before the payments kick in. The longer the deferred period, the lower the premium, and vice versa.
Coverage Length:
The policy will continue paying out either until you’re able to return to work, the policy’s expiration, or retirement age. While income protection helps in the short-to-medium term, combining it with long-term retirement planning ensures you’re covered throughout all stages of life.
Tax Relief:
Premiums for income protection insurance are eligible for tax relief at your marginal tax rate, which reduces the effective cost of your premium.
Smart Financial income protection policies cover injuries, illnesses, mental health conditions, and partial disabilities. We explain each of these below:
Injuries
Injuries that prevent you from working, whether they’re temporary or permanent, and due to accidents at work, home, or elsewhere.
Examples include:
The policy will pay out if the injury prevents you from performing your job duties for a significant period (after the deferred period).
Illnesses
Illnesses that prevent you from working, whether it’s temporary or permanent, and covers both physical and chronic illnesses. This includes, but is not limited to:
Mental health conditions
Mental health conditions are an increasingly recognised cause of long-term inability to work. Many income protection policies in Ireland now cover conditions such as:
Coverage usually depends on the severity of the mental health condition and whether it significantly impairs your ability to work. A medical diagnosis and a comprehensive assessment by a professional are often required.
Partial disability
Partial disability is a benefit where you can return to work part-time but not full-time. If you experience a condition that leaves you partially disabled, meaning you can return to work but only in a limited capacity (e.g., part-time or in a less demanding role), income protection may still provide partial benefits. This ensures you receive a proportionate payout to supplement your reduced income.
However, it’s important to note that coverage may exclude pre-existing conditions, and some policies have limits on the types of conditions covered, so it’s essential to review these carefully.
Those without sufficient savings: If you don't have substantial savings to support yourself during an extended illness, income protection can fill the gap. For added resilience, consider building a financial buffer through savings and investments alongside your income protection policy.
For those looking to protect their loved ones beyond income replacement, comprehensive life insurance cover can provide a lump sum payment in the event of death.
Before taking out an income protection policy, consider the following:
The longer your deferred period, the cheaper your premiums, but you should have savings or alternative support during this waiting time.
Ensure the policy covers up to 75% of your income, and check if it includes benefits for mental health and partial disability.
Make sure you understand any conditions that the policy doesn’t cover, and check for exclusions related to pre-existing health issues.
You can claim tax relief on your premiums, which lowers the overall cost of the policy.
Personal income protection is a crucial financial safeguard for self-employed individuals or employees without workplace coverage. This policy ensures a steady income if illness, injury, or mental health issues prevent you from working.
Executive Income Protection offers businesses a way to secure income for directors and key employees if they’re unable to work due to illness or injury. Unlike personal income protection, this policy is paid by the business, with premiums considered a company expense.
Our financial advisors can help you choose the most suitable policy based on your specific situation, income, and occupation.
We can compare a range of policies from multiple providers, ensuring you get the best deal.
If you ever need to claim, we can assist you through the process, increasing the chances of a successful outcome.
We can advise on how to maximise tax relief on your premiums, lowering the overall cost of the policy.
Get help from Smart Financial knowledgeable Income Protection advisers to discover coverage that meets your requirements.
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Weekends and Bank Holidays: Closed
The deferred period is the waiting time between when you stop working due to illness/injury and when the income protection payments begin, typically 4 to 52 weeks.
Notify your financial advisor or insurer, provide medical and income loss documentation, wait for the deferred period to pass, and receive monthly payments if approved.
Yes, you can claim tax relief on your premiums at your marginal tax rate, either 20% or 40%, thereby reducing the cost of your premium, but any payouts are taxable.
Yes, especially for self-employed individuals, people with dependents, or those without substantial savings.
The average cost varies but typically ranges from €20 to €150 per month depending on factors like age, health, and occupation.
The waiting period (deferred period) is generally between 4 and 52 weeks, depending on your policy choice.
No, income protection insurance does not cover job loss due to redundancy. It only covers illness or injury.
