Income protection protects your earnings throughout your working life. If at any point you suffer an illness or injury that stops you from working, you will still have some form of income until you are medically fit to return to work or you reach the end of your benefit period.
Unfortunately, statistics show that for a good chunk of the Irish population, luck is not on our side, and at least one third of us will be diagnosed with cancer in our lifetimes, 10000 of us will be suffer stroke each year and a huge number of others of us will suffer some form of accident, injury, illness or condition that will render us incapable of working and earning an income for some period of time.
If that happened to you, how would you pay your mortgage and car repayments? Car tax, car insurance, services and wear & tear? Groceries, utility bills, general insurances, and a whole host of other items such as kid’s clothes, school and extracurricular needs?
With the state allowance of 188* per week not nearly being enough to provide for an individual – let alone a family’s needs, what would your options be?
Quite simply: can you afford NOT to protect your income?
Let’s look at some of the key reasons people do not take up income protection:
• I can’t afford it.
Let’s face it, we’d all prefer to spend our hard earned cash on a great night out, a weekend getaway or new gadget rather than an insurance premium. The problem is, if you couldn’t work anymore, how would you pay for those nights out, holidays and gadgets, and even more seriously, your mortgage and household expenses? Your income is the single most important asset you have because without it, in the event of illness or injury, you may find yourself not being able to pay for those things you want and need. For as little as €18 /month (net) you can protect your income right up until age 65. Can you really afford not to have income protection?
• I’m fit and healthy so it won’t happen to me.
You only need to hear from 39 year old Trudy Doyle who led a healthy lifestyle and had no history of family illness to realise disease can strike anyone, at any time. While cancer and stroke statistics are grim, thanks to medical advances, people are more likely to survive serious illnesses – but it also means prolonged periods off work for treatment and recovery. The impact on income could be devastating without the right insurance in place.
• My savings will cover me.
This thinking amounts a simple mathematical equation that just doesn’t make sense. The cost of insuring your income is far less than the cost of obliterating your savings to only have to start saving again when, and IF you could resume your previous work and income level. Worse still, €50,000 in savings will last just 17 months – based on outgoings of €3,000 monthly – yet the average claim lasts 5 and a half years.
• My employer provides cover.
Your employer may provide cover but is it enough? Some people that suffer an illness or injury might return to work within a year or two, but for others it takes much longer, if they are ever in a position to return to work. Sick pay can also vary greatly between firms. In the first instance it’s important to know what you are covered for – a simple call to your HR department can help you determine what your entitlements are in the event of illness or injury.
• I already have cover for serious illness.
While this is a valuable cover that pays out a lump sum in the event of a serious illness, it may only cover you for certain illnesses specified on your policy. What if you were to suffer from a stress-related condition, depression or a back injury? These are the most common ailments suffered by income protection claimants yet none of these conditions are eligible for a payout on a serious illness policy.
Find out more about the benefits of income protection here and watch the video on the same page to hear Trudy Doyle’s experience of how income protection gave her peace of mind during her fight against breast cancer at age 39.
What advice about your situation? Give our team a call today on 091 586 500.