How To Maintain Your Quality Of Life Even In Sickness
Income Protection is a type of insurance cover which allows you to sustain your standard of living even in sickness. You can put in place cover of up to 75% of your gross income less any entitlements to State Illness Benefits while you cannot work due to illness or injury. You set the waiting period from which your benefits are to be paid to you. Income Protection premiums paid can qualify for tax relief at your marginal rate also – win win!
Our income is our most valuable asset. Without earning an income for a prolonged period of time, we could struggle to sustain the lifestyle in which we are accustomed to or we may not be able to cater to our basic needs. This is why it is imperative that we protect our income.
See below a practical example of an Income Protection need;
Simon is a 35 year old self-employed solicitor earning €120,000 gross income per year. He is a Class S PRSI Contributor. Simon opts not to take out Income Protection as he believes he does not have a need for it. If Simon became ill or injured and therefore could not work, he would not be able to earn an income. As he is paying Class S PRSI, he does not qualify for the State Illness Benefit. As a result of this, Simon may experience financial hardship in the long term if he did not obtain Income Protection cover to protect his income.
If Simon had have opted to take out Income Protection cover, he could protect his income for €90,000 (75% of €120,000) should he become ill or injured during the term of his policy. Premiums paid would qualify for income tax relief at his marginal rate of 40%. If Simon did take out Income Protection and ultimately had to claim for an illness or injury after his waiting period, his income would be protected and he could have the ability to lead a financially secure life as he recovers.
The decisions you make today are the key to your future financial security. Speak with us today to find out how we can help you protect your income.