# 20 year old teacher - Is "Income Protection" her overriding financial priority?



## mula (18 Oct 2006)

In a discussion about pension avc's for a 20 year old teacher mula suggested that " income protection should be her first priorty". Ive moved the discussion here. What do people in the Insurance forum think of the assertion?...........aj



munster man said:


> My daughter started work as a temporary primary teacher Sept.05.
> 
> A consultant from Cornmarket is in the process of signing her up for an AVC policy, but I have advised her to wait a few years before taking out this policy as she is very young (still only twenty). If she continues teaching she will have  her full 40 years service at age sixty.
> 
> ...



hi munster man

imho your daughter is far to young to be taking out an avc. income protection should be her first priorty and the rep should have had this at the top of their recommmendations. protecting your daughters lively hood is far more important then avcs atm

in relation to retirement
your daughter has the option to retire from 55 onwards on a reduced pension the details of which are available at www.cspensions.gov.ie

 i suggest you have a good read of this especially the FAQ section. they also have a pension modeller system which allows you to see the effects of early retirement on your daughters superannuation benefits.

with the increase in the amount you are allowed to put away for retirement (up to 40%  depending on age) your daughter should be in no rush to fund for her retirement at this stage


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## ajapale (18 Oct 2006)

*Re: AVC Cornmarket Suitable for a 20yo teacher?*



> income protection should be her first priorty



Really?


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## mula (19 Oct 2006)

*Re: AVC Cornmarket Suitable for a 20yo teacher?*



ajapale said:


> Really?



really really


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## ajapale (19 Oct 2006)

*Re: AVC Cornmarket Suitable for a 20yo teacher?*

Hi Mula,

I suggest the following might rate higher in terms of personal finance for a young professional person.


max out your contributions to your SSIA.
start saving for a deposit for a house.
pay down any debt accumulated during your student days.
consider health insurance.
consider further professional training and development.
I cant accept your assertion that income protection is the overriding priority in terms of personal finance for a young professional.

aj
[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT]


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## mula (20 Oct 2006)

*Re: AVC Cornmarket Suitable for a 20yo teacher?*



ajapale said:


> Hi Mula,
> 
> I suggest the following might rate higher in terms of personal finance for a young professional person.
> max out your contributions to your SSIA.
> ...



hi aj

well imho the first priority is to  protect the one thing that pays for all the above which is your income.  long term disability = no income  which = no munzos to pay for

SSIA
house or mortgage if you alreay have a house
student debt
health insurance
furhter traiining etc etc


mula


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## ajapale (21 Oct 2006)

Question relating to Income Protection split and copied from Pensions.


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## jpd (21 Oct 2006)

Have we got to the stage where a 20 year old's first priority is her pension ? 

I'm an atheist, but God help us!


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## jdwex (21 Oct 2006)

jpd said:


> Have we got to the stage where a 20 year old's first priority is her pension ?
> 
> I'm an atheist, but God help us!



My thoughts too! Too much of the world to see and her fund will be worth SFA if she gets run over by a bus!


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## ajapale (22 Oct 2006)

jpd and jdwex,

The question posed in this thread concerns "Income Protection" and the financial priorities of a 20yo teacher. 

"Income Protection" is a financial product aslo known as income continuance or PHI Permanent Health Insurance.

The question of pension avc's for young teachers is discussed in pensions.

aj


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## sunshine? (27 Oct 2006)

Would have to agree with Mula here, less say the bus didn't quite 'run her over' as jdwex suggested, but rather just knocked her down and as a result of her injuries she couldn't work for a couple of years. Without income protection she wouldn't be able to continue her SSIA contributions, which she was using to save for a deposit for her house. In fact whatever was left in the SSIA fund was used to pay off her student loans, leaving her with no income and no savings. With no savings she couldn't afford to complete the distance learning course while bored out of her mind on sick leave.

So I guess that just leaves the health insurance. So that beckons another debate - which is more important health insurance or income protection?
http://www.askaboutmoney.com/showthread.php?t=38448


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## mula (28 Oct 2006)

sunshine? said:


> Would have to agree with Mula here, less say the bus didn't quite 'run her over' as jdwex suggested, but rather just knocked her down and as a result of her injuries she couldn't work for a couple of years. Without income protection she wouldn't be able to continue her SSIA contributions, which she was using to save for a deposit for her house. In fact whatever was left in the SSIA fund was used to pay off her student loans, leaving her with no income and no savings. With no savings she couldn't afford to complete the distance learning course while bored out of her mind on sick leave.
> 
> So I guess that just leaves the health insurance. So that beckons another debate - which is more important health insurance or income protection?
> http://www.askaboutmoney.com/showthread.php?t=38448


 

income protection if you can get it


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## G123 (28 Oct 2006)

By my quick calculation, 

take a salary of €35k per annum
use an inflation rate of 3% p.a.
over 40 years this amounts to over €2.6m if my calcs are correct.
Q1 - Is this worth insuring?
Q2 - When should you begin to insure it - now?... or take a chance that you stay healthy and only start paying at, say, age 30?

I know what I'd do. I agree with Mula


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## ajapale (28 Oct 2006)

Q3 Whats the Premium?


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## mula (29 Oct 2006)

ajapale said:


> Q3 Whats the Premium?


1.65% gross if ure tui

less 42% tax relief 

about the 12 eur a fortnight mark

god bless the group schemes


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