FORSYTHE FINANCIAL PLANNING

Income Protection Insurance

The purpose of Income Protection Cover is to provide a regular income if you are unable to work due to illness or injury for a certain period of time and you suffer a loss of earnings as a result. You must be totally unable to perform the essential duties of your normal occupation and not be engaging in any other occupation.

Income Protection is designed solely to provide protection benefits and there is no surrender value payable at any stage under the policy. At the time of a claim, your earnings must be at the level that justifies the amount of cover you have chosen. If not, you will receive a reduced benefit. In this case, the insurer will not refund any part of the payments you have made.

How Important Is Your Income?

The income you earn determines the life you lead. It’s easy to think of all the ways you use your income; it pays for the day‑to‑day living expenses and bills that allow you to create a home and provide for your family. It also helps pay for special occasions that create lasting memories. If it suddenly stopped, your life would change drastically.

Under current legislation, the benefit payments will be treated as income and so are assessed for income tax, PRSI, and the Universal Social Charge (USC). The insurer will take any income tax, PRSI, and USC, in the same way as an employer would take them from a normal income, before providing the benefit to you.

Once your employer’s sick pay ends, you would have to rely on the State Illness Benefit and any savings and investments you might have.