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Income protection
Should You Get Income Protection Insurance
At Hennelly Finance, we understand that life can be unpredictable, and unforeseen circumstances such as illness or injury can have a profound impact on your financial stability. Our team of expert financial advisors in Galway is dedicated to helping you navigate the complexities of income protection insurance, ensuring that you have the peace of mind to focus on your recovery without the added stress of financial worries. We provide comprehensive, jargon-free advice tailored to your specific needs, helping you safeguard your income and maintain your lifestyle even when you can't work.
This insurance is a crucial component of a sound financial plan. It serves as a financial safety net, replacing a portion of your income if you become unable to work due to illness or injury. This type of coverage is designed to provide ongoing support, helping you manage your household expenses, mortgage, and daily living costs during difficult times. By partnering with Hennelly Finance, you can be confident that you are making informed decisions about protecting one of your most valuable assets – your ability to earn an income.
What is Income Protection?
Income protection, also known as permanent health insurance, is a form of insurance that provides you with a regular income if you are unable to work due to illness or injury. Unlike critical illness cover, which pays out a lump sum, income protection offers ongoing payments that help cover your living expenses during your recovery period. Consider this scenario: what would you do if you suddenly found yourself unable to work? How would you cover your mortgage, utility bills, and other daily expenses? Income protection ensures that you have a steady income stream to rely on, alleviating the financial strain and allowing you to focus on getting better.
Why Should You Consider Income Protection?
Many people insure their homes, cars, and other valuable assets, but often overlook insuring their income. However, your ability to earn an income is one of your most valuable assets. Without it, maintaining your current lifestyle and meeting financial obligations can become incredibly challenging.
Income protection is especially important because:
It covers long-term absences
Unlike short-term disability insurance, income protection can cover you for long periods, even up to your retirement age if necessary.
Comprehensive coverage
It can replace up to 75% of your income, helping you maintain your standard of living even when you cannot work.
Flexibility
You can choose the deferred period (the time between when you stop working and when payments start) and the benefit period (how long you receive payments), tailoring the policy to your needs.
Tax relief
The premiums you pay for income protection insurance are eligible for income tax relief, reducing the overall cost of your coverage.
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Benefits
Regular income
Receive a monthly income to cover your essential expenses while you are unable to work.
Long-term support
Payments continue until you can return to work or until the end of the policy term
Peace of mind
Knowing that you have a safety net in place allows you to focus on your recovery without the added stress of financial worries.
Customisable policies
Choose the level of cover, deferred period, and benefit period that best suits your needs.
How Does Income Protection Work?
This insurance is designed to be straightforward and effective. Here’s how it works:
Coverage
If you are unable to work due to illness or injury, the policy will pay out a regular income. This can be up to 75% of your annual earnings (less any state benefits or other protection plans you may have).
Deferred period
Payments begin after a pre-determined deferred period, which can be 13, 26, or 52 weeks. You choose this period when you take out the policy.
Benefit period
Payments continue until you return to work, reach the end of the policy term, until you retire of it you become unemployed.
Tax implications
While the income you receive from the policy is subject to income tax, the premiums you pay are eligible for tax relief, which can reduce the cost of your cover.
Commonly Asked Questions About Income Protection
Absolutely. Income protection provides a financial safety net, ensuring that you can continue to meet your financial obligations even when you can’t work. This is especially valuable in Ireland, where state benefits may not be sufficient to cover all your expenses.
You can insure up to 75% of your income. The exact amount should be tailored to your needs, ensuring that you have enough coverage to maintain your lifestyle without being over-insured.
Income protection only covers you if you are unable to work due to illness or injury. It does not provide benefits if you are made redundant.
Yes, the income you receive from an income protection claim is subject to income tax. However, the premiums you pay for the policy are eligible for tax relief, which can help offset the cost.
Consider factors such as the deferred period, benefit period, and the level of cover. It’s also important to understand the specific terms and conditions of the policy, including any exclusions or limitations.
Protect your most valuable asset with expert advice from Hennelly Finance.
If you're ready to explore income protection insurance and secure your financial future, Hennelly Finance is here to help. Our advisors will assess your current financial situation, discuss your needs, and help you choose the best policy for your circumstances.
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Where we are
Insurance Brokers & Financial Consultants,
Unit 3B, Tí Phuirséil,
Barna, Co. Galway.
H91 AF1W
Opening Hours
Monday - Thursday: 9am -5pm
Friday: 9am - 4pm
Appointments available outside normal working hours upon request.
