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.
Unlike employer-based plans, this policy is set up independently and tailored to your unique financial needs. Our Smart Financial advisors can provide personalised guidance to help you choose the right income protection insurance to secure your future income.
Income protection is especially important for:
If you have a mortgage, pairing income protection with mortgage protection for illness-related income loss ensures both your income and home are secure.
Jane is a self-employed marketing consultant earning €50,000 per year. Her income supports her mortgage payments and living expenses. When Jane was diagnosed with a chronic illness, she couldn’t work for eight months. With a 13-week deferred period and coverage up to 75% of her income, her policy provided her €3,125 monthly after-tax income. This covered her mortgage, household expenses, and allowed her to focus on recovery.
Income protection covers several categories of conditions, including:
The deferred period is the waiting time before you start receiving payments. A longer deferred period, like 13 or 26 weeks, reduces your monthly premiums but requires you to have savings for that period. Shorter periods, such as 4 or 8 weeks, are more expensive but provide quicker support.
Income protection premiums vary based on:
A 35-year-old consultant earning €60,000 with a 13-week deferred period might pay €30 to €40 per month for 75% income coverage.
A 45-year-old construction worker earning €60,000 with a 4-week deferred period might pay €80 and €100 per month for 75% income coverage due to the worker’s older age, higher-risk occupation, and shorter waiting period.
Combining income protection with savings and investments is a smart strategy for building long-term financial resilience.
Premiums paid for income protection insurance are eligible for tax relief at your marginal rate. For those at the 40% tax rate, this reduces the actual cost of your policy.
For example, if you pay €100 per month for income protection and you’re taxed at 40%, you could claim €40 back in tax relief (40% of €100), bringing your actual monthly cost down to €60. This benefit makes income protection more affordable, helping self-employed individuals and those without employer-provided coverage to secure a financial safety net against illness or injury.
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.
Get help from Smart Financial knowledgeable Income Protection advisers to discover coverage that meets your requirements.
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It generally covers up to 75% of your pre-tax income.
Deferred periods range from 4 to 52 weeks, depending on your policy.
No, income protection does not cover job loss due to redundancy.
Yes, premiums are eligible for tax relief at your marginal tax rate, reducing the effective cost.
It covers various conditions, including physical injuries, chronic illnesses, mental health issues, and partial disability.
Notify your insurer, submit medical evidence, complete the deferred period, and receive monthly payments if your claim is approved.
