New Ireland Income Protection

When you have a mortgage, you need mortgage protection, which clears your loan if you die, but doesn’t pay anything if you’re ill & can’t make your mortgage payments. You can get Life Insurance, which pays your family a lump sum if you die, but again doesn’t pay anything if you become ill.

You may also have a Serious Illness policy. This will pay a partial or full lump sum if you suffer an illness or injury covered by the policy. The illnesses & injuries covered by these policies are usually quite severe, and the definitions are strict. You’ll only be paid once, and with most policies you can’t make multiple claims.

Income protection however pays out on any illness, injury or disability that prevents you from working. (pre-existing conditions may be excluded). With Income protection, you can make multiple claims over the lifetime of your policy.

While you’re healthy, you pay a premium every month.

If you are unfortunate to fall ill or become injured and are unable to work during the term of your plan, you can then make a claim and receive a monthly income until you’re fit to return to work or you reach the end of the plan.

Every income protection provider has a minimum number of deferred weeks in their terms and conditions.

This means you cannot start an income protection policy and start claiming straight away. Deferred periods range from 4 – 52 weeks. The longer your deferred period the cheaper your policy will be.

You will also have the option to apply indexation to your income protection policy. This allows for your income protection policy benefit to increase each year in line with inflation. Be aware when indexation is applied to a policy it means your premium will also increase.

While you’re getting your monthly income, you don’t pay any premiums. When your illness ends and you return to work, you start paying premiums again.

When you first call to make a claim, we’ll want to find out how you are. We’ll send you a Claim Form to ask you about what’s happened and how we can help you – not just with paying out your claim, but with everything else, like rehabilitation, too.

• We may also arrange to have a nurse contact you by telephone to discuss the circumstances of your claim and identify how we can help with your recovery.
• You might prefer to speak to someone in person, so just ask and we’ll send a nurse out to visit at a time that suits you. Or we can do things via email and post if that’s easier.
• The next stage will be to obtain medical reports from your treating doctors, and we may ask you to attend a medical examination to assess your claim and to see what rehabilitation services we can offer to you.

Even when we’re paying you your monthly income, your claims specialist will still be on hand. You can talk to them about anything that’s on your mind. They’ll be there for you all the way, to support you and to help you get better, until you’re confident you don’t need them any longer.

You may need income protection if you:

• Are self-employed and would have no source of income if you couldn’t work due to illness or disability.
• Have little or no sick pay from your employer.
• Have dependents who rely on your income.
• Have no other source of income.

Do not have sufficient benefits to replace your lost income to cover your expenses while ill.
Before you take out income protection, you should check if you are entitled to other benefits:

• Social welfare illness benefit: a weekly payment you may get from the State.
  If you are self-employed it is important to know illness benefit is not available to you.
  The maximum personal rate of illness benefit is €208 per week.
• Would this amount cover your expenses?
  Social welfare disability benefit: a weekly payment you may get from the State.
• It is not available if you are self-employed.
• Sick pay: your employer pays all or part of your wages for a time. This will depend on the terms of your employment which should be shown in your employment contract and staff handbook.

• You can get tax relief on your income protection premium at your marginal (highest) rate of tax, up to a yearly limit of 10% of your total income.
• This can make your premium more affordable, but remember your benefit will be taxable if you make a claim.
• If you have an individual policy, your insurance company will give you a statement showing the premiums paid.
• To claim your tax relief you need to include this information with your tax return.
• If you are a member of a group scheme, your employer usually takes your premium from your salary before tax.
• In this instance, you would not qualify for tax relief.

Not everyone needs their income to start as soon as they’re out of work. If your employer pays you sick pay, you might only want your money to kick in after that.

The time in between when you stop working and when we start paying you is called your deferred period. You can choose how long this is: 8, 13, 26 or 52 weeks).

The longer you wait, the lower your premiums will be.