The MC Financial Simple Guide to Income Protection
Rob O’Neill
Senior Financial Advisor
Our ability to earn is probably our most important asset, without it we may be unable to pay our mortgage, feed and clothe our children or save for a rainy day. That’s why it is so important to protect our income should you find you are unable to work due to injury or illness.
What is Income Protection?
Income protection cover protects your monthly income should you have an accident or get ill, generally a policy will only pay out if you are unable to work in your specified job area. For example, someone working in construction who is injured and unable to carry heavy materials on a building site can make a claim if construction worker is his specified job role.
How does Income Protection work?
You can protect between 0% and 75% of your monthly income and choose a deferred period of 4-52 weeks, the shorter deferred period you opt for, the more expensive your policy will be.
Why should I take out Income Protection?
If you are unable to work for an extended period, it may be difficult to maintain your standard of living on a social welfare payment alone. More importantly though, if you are self-employed income protection is vital as you may not be entitled to a disability payment.
How do I make an Income Protection Claim?
Stage 1
You cease working due to an accident or illness.
Stage 2
You make a claim with the insurer with relevant information from your doctor.
Stage 3
The insurer starts paying out a monthly benefit after your deferred period.
Stage 4
The policy pays out until you return to work or reach the maximum pay-out length.
How much will Income Protection cost?
Income Protection is a tax efficient form of cover as you will be entitled to claim tax relief on the premiums. For example, if your policy costs €50* per month you can claim relief of €20.50, so the net cost to you will be €29.50.
*This example is for illustration purposes only and is correct as of 4th November 2014.
To find out more about how Income Protection can work for you, talk to Rob, our Income Protection expert today by calling 01 822 8022 or by emailing rob@mcfinancial.ie.
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