In the very simplest terms Income Protection is a type of protection policy designed to protect your income. It provides an alternative income if you are unable to work due to injury or illness. This can give you financial security and peace of mind while you recover.
We all have mortgage protection, car insurance, home insurance and travel insurance, to name but a few. But what pays for all these things? Your income. So why would you not consider protecting it.
Your income is your greatest asset. Without it the bills wouldn’t be paid, the mortgage wouldn’t be paid, the car wouldn’t be there. And there would be no luxuries like gym memberships or holidays. Without it your lifestyle would be financially impacted.
It can be easy to take your income for granted. But have a think about what would happen if an illness or injury left you unable to work. Do you have a plan in place to provide an alternative source of income? Ask yourself:
- How long would you receive payment from your employer?
- Do you have savings you could use to sustain your lifestyle?
- What ways can you reduce your outgoings?
- Do you have additional bills e.g., medical that need to be taken care of?
- Is there family you can ask for help?
If you are entitled to it, the State Illness Benefit is currently €203 a week. Would that cover your current outgoings? Make a list of all the essential things like food and heat and consider it. Unfortunately for many people it is not a pretty picture.
An income protection plan pays you a replacement income until you return to work or until your chosen retirement date, if you’re not fit to return to work before then. Many of the products available not only offer financial support but also a range of rehabilitation and career change programmes designed to help you get back on your feet. It really is a way of protecting your quality of life.
10 May 2021