# Income Protection



## eamonn (24 Jul 2008)

Is income protection a good product or handy money for insurance companies/brokers. I have got monthly premiums  based on for 3,6 and 12 months coverage by employer. My present employment  only pays for 5 days while out sick. The  policy is sold on covering 75% of salary but in actual fact the  Social Welfare coughs up the first 200 every month, making the contribution  from the insurance company more like 50%. Contributions are tax deductable so the premiums are effectively 42% less due to increase in tax relief.  To date I have been extremely healthy and have  hardly missed  a days work in 15 years. I am 37 years old.


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## ClubMan (24 Jul 2008)

Like any insurance product income protection policies, cover and premiums vary so it's difficult to generalise too much.


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## Marathon Man (27 Jul 2008)

Yes, it is a handy money maker for Insurance Cos.

If you don't need it, it is a total waste.

However....if you do need it, it's a Godsend.  If you don't have it and you do find that you need it, you are probably uninsurable at that stage -or, at the very least will be hit for significantly higher premiums. 

It's a trade-off.  If you absolutely *know* that you'll never need it, then don't bother. 

With your employer only covering 5 days, and you probably have the "normal" debts too, then it's probably a good idea to have some cover.



eamonn said:


> To date I have been extremely healthy and have  hardly missed  a days work in 15 years.


  Like the financial adds, past performance is no guarantee as to future performance.  You have a good track record but that doesn't mean that something unexpected isn't round the corner.


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## LDFerguson (28 Jul 2008)

eamonn said:


> The policy is sold on covering 75% of salary but in actual fact the Social Welfare coughs up the first 200 every month, making the contribution from the insurance company more like 50%


 
This isn't quite right.  The Social Welfare Benefit for disability is roughly €200 every _*week*_.  This works in your favour, as you only need a policy for 75% of salary, less the Social Welfare Benefit.  The premium for this will be lower than if you insured for a full 75% of salary.


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## browser (25 Sep 2008)

I thought that the Disability benefit was means tested, so would the fact that you have say €300 per week coming in off an INcome protection policy not disqualify you from claiming the €200 or so Disability benefit?


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## LDFerguson (25 Sep 2008)

It's not means tested unless you have insufficient PRSI contributions.  So for most PAYE workers you can get an Income Protection claim and the State benefit.  See here.


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