Protect Stability and Security with Executive Income Protection in Ireland
Discover how Executive Income Protection secures your most valuable asset—your income. Explore our customised solutions in Ireland.
Protect your financial future against unexpected setbacks with custom policies and expert advice. Contact us today or fill out our contact form for a consultation.
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What is Executive Income Protection?
Executive Income Protection is a specialised insurance designed to provide financial security for the self-employed, company directors and key employees, in case of loss of income due to illness or injury.
This protection ensures that if you’re unable to work, up to 75% of your salary is covered, allowing you to maintain your standard of living without compromise. Remember, many self-employed people are unable to claim PRSI-funded Illness Benefit.
This insurance is important for anyone whose financial responsibilities require protection against the unpredictable, ensuring your bills get paid while you’re ill. Business owners & the self-employed can also pay for the premiums through their company.
How Does It Work?
Learn how executive income protection works, to protect your financial future effectively. Here’s a step-by-step explanation of the Application Process:
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You select the portion of your income you wish to insure, up to 75% of your gross salary.
You can insure yourself for less than 75% of your salary, but make sure this amount will cover all your expenses, bills and ongoing savings.
Term
How long will you need cover for? Long terms can make your policy more expensive, but it’s very expensive to apply for a new policy when you’re older.
You can usually apply for a term up to age 65.
Deferred Period
The deferred period is the amount of time you have to wait before your policy begins to pay you.
You can choose from 4 weeks up to 52 weeks.
Longer deferred periods reduce the cost of your policy, but you’ll have to live off your savings until you can make a claim.
Choose a deferred period that won’t affect your quality of life, if you have a long illness.
Underwriting
Your financial advisor will take your age, smoker status & health information, and details of your employment.
Some occupations are considered more risky than others, and your advisor will be able to provide you with a personal quote.
Your Recommendation
Your advisor will recommend a provider, and will submit your application for you, dealing with the insurance company’s queries on your behalf.
Be as clear and honest as possible when submitting your application information. Incorrect details can delay your application, and in some cases will prevent a claim being paid.
What Happens If I Become Ill?
Making a Claim
If you have an illness or injury that prevents you from working, contact your financial advisor, or your insurance company directly.
You’ll be given a claim form to fill out, confirming details of your employment, your current income, and your occupation.
Your insurer will also contact your doctor for details of your illness, and to confirm you meet the disability definition of being unable to perform your work due to illness or injury.
Once your claim has been accepted, you’ll be paid a monthly income, once your deferred period is over.
Don’t wait too long to start your claim, as it can take time for your details to be received from your medical team.
Receiving Benefits
Once your claim is approved, you start receiving payments that replace a part of your lost income.
These benefits continue until you are fit to return to work, reach the age limit specified in the policy, or the policy term ends.
Tax Treatment
The payments you receive from your Income Protection claim are treated like salary for tax purposes. They will be subject to PAYE, PRSI and USC.
This means you’ll still be contributing to the State Pension while you’re ill.
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How to Select the Right Executive Income Protection?
Selecting the right executive income protection plan is essential to ensure you have coverage customised to your needs and financial situation.
Here’s are the comprehensive steps to help you make a choice:
Your Basic Required Income
What are your current essential financial obligations, like mortgages, debts, and everyday living expenses? Make sure your chosen insured amount will cover these vital outgoings.
Understand the Coverage Options & Additional Benefits
Familiarise yourself with the different types of policies available. Every insurance company is slightly different. Here are just a few of the different features you can choose from:
Fixed Premiums – the cover and your payment will never change
Indexed Premiums – the cover and your payments increase, in line with the cost of living.
Escalation in Claim – the cover and your payments increase, but your income during a claim will also increase
Hospital Cash – if you’re hospitalised, you’ll be able to make a claim, even if it’s within your deferred period
Proportionate Payment – a partial payment, that helps you gradually ease back into a full-time work pattern
Pension Payment Cover – you can still make pension contributions while you’re not working, providing security for your future
Guaranteed Insurability – if you or your staff have received a raise, you can increase the cover
Compare Premiums and Benefits
Analyse the cost versus benefits of various policies. While it might be tempting to choose a plan with lower premiums, make sure it provides sufficient coverage. Compare different insurers’ offerings to find the best balance between cost and the extent of protection.
Benefits of Executive Income Protection
Executive Income Protection provides essential financial security and assurance for high-earning professionals. Here are the key benefits:
Continuous Income During Illness or Injury
When you’re unable to work due to illness or injury, executive income protection replaces a significant portion of your income.
This enables you to maintain your standard of living, manage everyday expenses, and protect your savings without compromise.
It’s a fundamental protection for your mortgage or rent, and keeps your housing secure.
Multiple Claims
You can claim more than once on the same policy, so long as the premiums have been maintained.
Tax Relief on Premiums
Your company can claim corporation tax relief on the premiums it pays on your behalf.
Security for your Business
Protect your company against the loss of key members of staff due to long-term illness.
Income Protection will allow you to ensure that staff members are looked after during illness, while still leaving available funds in the company to temporarily replace them.
If a staff member is ill, and making a claim, there’s a waiver of premium for this policy, further reducing the cost to your business.
Frequently Asked Questions
Who qualifies for Executive Income Protection in Ireland?
Typically, it is available to company directors and key employees. The policy is usually taken out and paid for by the business on behalf of the individual covered.
How much of your income can you insure?
You can insure up to 75% of your gross salary under Executive Income Protection plans. This includes salary and other benefits but excludes bonuses and commission. The actual amount you can claim is also reduced by any social welfare benefits you may receive.
Can the policy cover pension contributions?
Yes, many policies also cover pension contributions. Typically, you can cover up to 35% of salary or a maximum of €50,000 to ensure that pension contributions continue if you are unable to work.
Can Executive Income Protection cover temporary disabilities?
Yes, the policy covers both temporary and permanent disabilities, as long as the disability prevents the insured from performing their job duties. Benefits are paid during the incapacitation period until the insured can return to work or reaches the policy’s expiry age.
Get Qualified Financial Advice
Choose Greenway Financial Advisors Ltd for professional financial advice. We work with several insurance providers, and can help you compare the market for the best cover at the best price.
If you’re ready to find a policy that offers comprehensive protection customised to your needs, Greenway Financial Advisors is here to help. Contact Greenway Financial Advisors Ltd today to arrange a meeting with one of our advisors.
Greenway Financial Advisors Limited is regulated by the Central Bank of Ireland. Registered No. C168372