Income Protection in Ireland
If illness or injury stopped you working tomorrow, how long could you pay the bills? Income protection replaces up to 75% of your salary until you’re well enough to return – or until retirement.
Last reviewed by Debbie Cheevers, QFA, RPA · 30 June 2026
What is income protection?
Income protection is an insurance policy that pays you a regular replacement income — usually up to 75% of your salary — if an illness or injury leaves you unable to work. Payments continue until you’re well enough to return to work or you reach your chosen retirement age.
It’s the only type of cover that replaces your ongoing earnings rather than paying a one-off lump sum — which is why it sits at the heart of most family financial plans.
At a glance
Who needs income protection?
PAYE employees
Statutory illness benefit caps at around €232/week and only lasts up to two years. If your employer doesn’t offer long-term sick pay, income protection fills the gap.
Last reviewed by Debbie Cheevers, QFA, RPA, 30 June 2026. Information is general and not personalised financial advice.
Self-employed & directors
You don’t qualify for State illness benefit at all. If you can’t work, your income stops the day you stop. Income protection is usually essential, not optional.
Anyone with a mortgage or dependants
If your salary pays a mortgage, school fees, or supports a family, income protection makes sure those commitments are met if you’re out of work long-term.
How income protection works
You pay a monthly premium. If illness or injury stops you working, the policy pays you a regular income – usually up to 75% of your gross salary, less any State illness benefit.
Payments start after a chosen deferred period (4, 8, 13, 26 or 52 weeks) and continue for as long as you’re unable to work, up to your chosen retirement age (typically 60, 65 or 68).
The policy is medically underwritten when you apply, so the cover is locked in even if your health changes later.
Three numbers to choose
Tax relief makes it much cheaper than you think
Income protection premiums qualify for income tax relief at your marginal rate – 20% or 40%. A higher-rate taxpayer paying €100 a month effectively pays only €60 after relief.
The benefit, when paid, is treated as PAYE income (taxed normally). The trade-off is that you get the relief upfront and the policy genuinely pays your replacement salary if needed.
Indicative monthly premium
| Age | Cover €40,000/yr | After 40% tax relief |
|---|---|---|
| 30 | €38 | €23 |
| 40 | €55 | €33 |
| 50 | €95 | €57 |
Indicative only. Premiums depend on age, occupation, smoker status, health and deferred period.
How much does income protection cost in Ireland?
The cost of income protection in Ireland depends on a handful of factors. Because premiums qualify for tax relief at your marginal rate, the real cost is often far lower than the headline figure — a higher-rate taxpayer effectively pays around 40% less.
For an accurate, personalised price, use our income protection calculator or book a free consultation and we’ll quote across the market for you.
What affects your premium
Income protection for the self-employed
If you’re self-employed or a company director, income protection is rarely optional. You don’t qualify for the State illness benefit that PAYE employees receive, so if illness or injury stops you working, your income can stop the very same day.
A personal policy replaces up to 75% of your earnings, while directors and owner-managers can often arrange executive income protection — where the company pays the premium as a tax-deductible business expense.
Why it matters more if you’re self-employed
Income protection vs. other types of cover
| Cover type | What it pays | When it pays |
|---|---|---|
| Income protection | Up to 75% of salary, monthly | Long-term illness or injury preventing you working |
| Serious / specified illness | One-off lump sum | You’re diagnosed with a listed serious illness |
| Life insurance | One-off lump sum | You die during the term |
| Mortgage protection | Decreasing lump sum to clear mortgage | You die during the term |
| State illness benefit | ~€232/week (PAYE only) | Up to 2 years, after which it stops |
Income protection is the only product that replaces your ongoing income. The others pay one-off lump sums in specific circumstances. Many people combine income protection with serious illness or life cover.
How we set up cover
- 1
Free consultation
A 30-minute call to understand your job, salary, sick-pay arrangements, dependants and existing cover.
- 2
Market quote
We quote across the six leading Irish providers and explain the differences in definitions, claim history and pricing.
- 3
Apply & underwrite
We help you complete the medical and financial declaration, flag anything that could affect underwriting, and push back on unnecessary loadings or exclusions before you submit.
- 4
On cover
Policy is issued. We’ll review it every year – cover should rise with your salary so the 75% replacement stays accurate.
We work with Ireland’s leading life & pension companies
Frequently asked questions
How much income can I cover?
Up to 75% of your gross salary, less any State illness benefit you’d be entitled to. So if you earn €60,000, the maximum cover is around €45,000/year less roughly €12,000 of State benefit – so about €33,000/year of insured benefit.
What’s the deferred period and which should I pick?
It’s the wait between stopping work and benefit starting. Common choices are 13 or 26 weeks. The longer the deferred period, the cheaper the premium – but you need savings or employer sick pay to bridge the gap.
Does it cover mental health and stress-related illness?
Yes – all the main Irish providers cover mental health conditions that prevent you working, on the same basis as physical illness. Mental health claims are now a major share of all income protection payouts.
What if I’m self-employed?
You can absolutely take out income protection. Underwriters will ask for proof of income (typically 2–3 years of accounts or tax returns). Because you don’t qualify for State illness benefit, your cover usually replaces the full 75% of net earnings.
Can my company pay for it (executive income protection)?
Yes – an Executive Income Protection plan is taken out and paid by your company. Premiums are usually a tax-deductible business expense and benefit (when paid) is treated as salary. We can set this up for directors and owner-managers.
How long does the benefit last?
It can last all the way to your chosen cease age (typically 65 or 68). Unlike short-term sick pay, income protection is designed for long-term illness – the average claim runs for several years.
Is there tax relief on premiums?
Yes – you get income tax relief at your marginal rate (20% or 40%). The benefit, when paid, is taxed as PAYE income.
What does it cost?
Typically 1–3% of the salary you’re insuring, depending on age, occupation, health and deferred period. After tax relief, a higher-rate taxpayer often pays €25–€60/month for meaningful cover.
Find out what your cover would cost
A free 30-minute call is the easiest place to start. Quote across the market, no obligation.