# On Income Protection, should I take voluntary redundancy?



## KTD123 (11 May 2016)

Hi
I've been on Income Protection since last November due to mental health issues E550pw net. I've been offered voluntary redundancy E80k net.  This would be enough to pay off the mortgage with not much left over.  
My husband works but is taxed to the hilt due to me taking the tax credits.  E350pw net
Q1. Would my husband have to wait until the next calendar year to take my tax credits? 

I'm currently too ill to work, so if I take redundancy, I don't see myself working for at least 12 months.  If I was well, I would jump at the offer.  I don't ever see myself staying with the company longterm as the work environment is very stressful and detrimental to my health.  I see the income protection as a security blanket and I'm a bit scared to let go of it.
Q2. Am I stupid to pass up the redundancy offer?


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## Ravima (11 May 2016)

Will you get income protection until you recover to full health or until retirement or is there a finite period in which it will be paid?  Redundancy offer is about 4yrs payment. If you take redundancy, what will you do in 4 yrs time for income? Will you be able  to return to workforce? 

If you would 'jump at the offer' if well, what is stopping you now? If you were well and took it, would you get another job?

there are many questions you must ask yourself. I do not want to know your answers as I cannot give you any advice.


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## Joe_90 (11 May 2016)

Does taking the redundancy impact on your payment protection?


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## KTD123 (11 May 2016)

Joe_90 said:


> Does taking the redundancy impact on your payment protection?


Yes.  Its a company policy so it would end if I left the company.  Otherwise it continues until I return to work, retire or die.  

I'm 37 so still a way to go until I'm ready for retirement.


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## cremeegg (11 May 2016)

You need a realistic opinion on your likelihood of returning to work, and when.

This will depend on recovering your health and after that securing a job.

If this is likely in a 1 or 2 year time frame then you should consider the redundancy. If not you probably shouldn't.

What are the job-prospects in your field. Will your skills or experience become out of date. Is a history of being off work with mental health issues likely to cause problems in securing future employment.

I suggest that €550 per week in the hand is better than a whole flock in the bush.


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## JoeRoberts (12 May 2016)

Insurance companies work hard to get people off the disability scheme especially young people.  Have had a number of cases go to appeal stage and lost. 2 were for mental issues. Need to take this into account. I would seriously consider the redundancy with all you said and this added risk. If insurance decide you are fit for work and you lose your appeal the company have a problem to take you back as your doctor is saying you are not fit for work . Insurance have the final say with their independent doctor they select


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## Monbretia (12 May 2016)

I agree with above poster, insurance companies are divils for trying to get people off these sorts of schemes when it's not clear cut, as in a disability you can see and prove easily.   

I know personally of a case where you just would not believe the lengths they went to trying to prove the person was fit for work, he eventually managed to negotiate an early pension but would have been a lot older than you, it added an awful lot of stress to the situation though and like you he knew he would never go back to that employer as it was the root cause of the problem.

While I would  always say take an income over a lump sum it's not as straightforward as that.


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## Gerry Canning (13 May 2016)

ktd123,

Insurance companies will rightly review longish term payments such as yours , if it is likely your mental health issues will leave you ( in insurance companies reasoning) as (unemployable) for a long long time ,then the 550 beats the redundancy payment.
12 months @ 550 is a lot less than k80 .
From your info I would be inclined to take the voluntary redundancy, it would be nice to have no mortgage.

Good Luck.


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## Steven Barrett (13 May 2016)

I'm with cremeegg on this. 

There is no black and white answer to it as you don't know how long you will be out for. If your IP policy pay out to age 65 and you never return to work, the policy will pay out €1,264,659 net over the lifetime of the plan. So you have to try to assess when you will be able to go back to work. I realise with mental health issues, this is probably impossible to know. 

Then there is the redundancy issue. Is it a take it or leave it? Will it be offered to you again in the future? 

Insurance companies will try to get you off cover. Of course they will, you are costing them money but if your health still means you cannot do your job, you have nothing to worry about.  

There is no right or wrong answer on this. You do what you feel is right for you and your family. 

Best of luck. 

Steven
www.bluewaterfp.ie


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## JoeRoberts (13 May 2016)

SBarrett said:


> if your health still means you cannot do your job, you have nothing to worry about.


Have to totally disagree here Stephen based on the cases I have dealt with. Irish Life in particular have become extremely aggressive in recent years. After being disqualified by Ir Life based on their "independent" consultant, the employees' doctor would still not certify them fit for work. They all ended up with a P45.


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## Steven Barrett (13 May 2016)

I agree with Irish Life. I have a client on a long term IP claim. One day, she was followed home from the supermarket. They parked outside her house. Followed her to pick up the kids. She was freaking out at this stage, so she phoned the cops. When he saw the cop car, he speed off. He later presented himself to the Garda station as a PI hired by in the insurer. One of the reasons I don't use Irish Life for income protection. The main reason is their contract is rubbish and has so many holes in it, they can stop the claim pretty easily. 


Steven
www.bluewaterfp.ie


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## 44brendan (13 May 2016)

SBarrett said:


> One of the reasons I don't use Irish Life for income protection. The main reason is their contract is rubbish and has so many holes in it, they can stop the claim pretty easily.


Steven you have again raised an issue that I thought would  by now have been closed off by Consumer legislation!!! Have you a mine of further information on insurance companies who apparently legitimately water down their contracts through sneaky clauses in the small print. I would have thought that this type of behavior is anti consumer and unfair to those of us who are either unable to understand or too trusting to read the pages of small print that are attached to these contracts.
These issues are getting no major publicity. Yet from some of the posts above would appear to be undermining the validity of contracts consumers believed they have when they sign up to these policies.
Perhaps an issue like this deserves a Key post of its own. I thought that I was pretty financially savvy but in terms of insurance I tend to sign on the dotted line without going through each clause with a fine tooth comb. Do we need to do this with all policies now? Is there any general website warning of the limitations on specific companies/types of policies?


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## Steven Barrett (13 May 2016)

I wrote a blog on the T&C of the various Income Protection policies a couple of years ago. I updated it again in January 2015 when Royal London entered the market. There are loads of hidden bits in the T&C. Some good, some bad. 

For instance, for non-nationals who would intend to go home to recover if long term ill, Aviva are the only company that let you recover outside of the Ireland or UK. Irish Life say they can charge you for medical expenses and can send someone to your house without appointment (see above for a real live case).  

http://www.bluewaterfp.ie/risk-benefits/income-protections-terms-and-conditions/


Steven
www.bluewaterfp.ie


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## thedaddyman (13 May 2016)

Key thing here is your mental state, not the money. If your work is contributing to the mental illness then take the redundancy, wave 2 fingers at the company and find yourself mortgage free at 37. If you stay on IP for a treatable illness, (and insurance companies are likely to believe it is) then you will have to engage with the company on a regular basis for checks ups etc and you will have the stress of every time that happens worrying that they are going to stop the IP anmd make you go back to work.

Secondly check with your Social Welfare office regarding your entitlements given your condition if you take a package.

When you are off, you can focus on your health, well being and the future


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## 44brendan (13 May 2016)

thedaddyman said:


> Secondly check with your Social Welfare office regarding your entitlements given your condition if you take a package.


Taking voluntary redundancy does not disallow a person from receiving SW. AFAIK only the first 2 weeks are disallowed. OP may be entitled to disability allowance and this should be investigated.


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## Monbretia (13 May 2016)

Disability allowance is means tested though and the redundancy and any other income would probably scupper that plan.  You can get jobseekers benefit for 9 months but as you are not actively seeking work you could apply for illness benefit based on prsi but will run out and then option will be invalidity pension which again is hard to get but not impossible.  A chat with Citizens Info would advise on what options might be there long term.


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## Mrs Vimes (16 May 2016)

KTD123 said:


> Yes.  Its a company policy so it would end if I left the company.  Otherwise it continues until I return to work, retire or die.
> 
> I'm 37 so still a way to go until I'm ready for retirement.



If the company is making people redundant, could it end up closing? If it did, would that end your policy as well?


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