Itâs highly likely that when you were a smallie, your ma or your da told you that to be successful in life, you need to do well in school, get a good job, and work hard. Itâs not bad life advice, though itâs probably a little different now given that every eight-year-old wants to be a YouTuber.
Instead of working hard, all you gotta do to be a millionaire is make videos of you playing video games while screaming at your computer. Keep it up, son, and someday you might be PewDiePie.
What your parents probably didnât tell you is that life isnât linear and that sometimes shit happens. You can work hard and do everything right and then you can get sick or be in an accident, and it can wipe you clean out of the workforce.
The wheels will come clean off, and youâll be stuck struggling to make ends meet on the governmentâs paltry State Benefits (itâs currently âŹ203 a week) or blowing an absolute hole in your savings.
Unless you have Income Protection.
Presumably, youâre considering it, and thatâs whatâs brought you here to my corner of the internet.Â
Welcome!
A quick recap if youâve stumbled here by mistake or if this is your starting off point:Â
Income Protection is a type of insurance that pays you a replacement salary if you can’t do your job, long-term, because of any injury or illness.
The average Income Protection claim, for context, is about seven years.Â
Income Protection cover doesnât kick in immediately; instead, you choose a waiting period (called a deferral period) of either 4, 8, 13, 26, or 52 weeks. Once youâve been out of work for that period of time, the insurer will start paying you a replacement income.
As far as Iâm concerned, everyone should have Income Protection. For one, you donât actually have to die to reap the benefit, which is a novelty for life insurance. And it literally covers everything from long-term back pain to chronic depression.
Now weâve covered the basics, letâs look at how you should compare Income Protection policies. Â
At lion.ie, weâre an online Life Insurance broker, and we deal with all the major insurers. For Income Protection, your options are:
For the TL;DR, I recommend Avivaâs Income Protection.
For the not-TL; D.R., keep reading.
Meet Sally đ
Sally is a 40-year-old accountant. For the sake of argument, she makes the average salary in Ireland of âŹ45,611. This is a precise number and as itâs from the CSO so we can assume itâs legit.
Sally wants Income Protection with a 13-week deferral period.
Keep âer lit, Sally.
If Sally were to use my magic quote machine, her quote would look like this:
On the left, youâll see a list of the insurers. The middle column is the price before tax relief. And the right column shows the actual cost after tax relief.
The amount of tax relief you can claim depends on how much income tax you pay. If you pay 20% income tax, you get 20% tax relief. If youâre a higher earner and pay 40% income tax, well then you can get 40% tax relief which is WHOPPER! And one of the main reasons that I prefer income protection to serious illness cover
If youâre wondering why youâre seeing double, itâs because some insurers offer two types of Income Protection: Reviewable and Guaranteed.
Reviewable means the price wonât necessarily stay the same over time, i.e. the insurer can review your policy/situation and change the price every 5 years.
Guaranteed or Fixed is a sticky price.
For what itâs worth, Iâd usually recommend Guaranteed. It may cost a few quid more at face value, but at least you know itâll stay at that price. This is especially true since COVID19 joined the party – the insurers will be looking for any excuse to raise premiums.
P.S. if you want more info on how your premium/price you pay is calculated, hop over here to my article on Income Protection calculators for some more soothing bedtime reading.
You might be tempted to go for the cheapest quote. You wouldnât be the first person to take the easy option; you wonât be the last. However, itâs also worth looking at the benefits each insurer offers.
So, because Income Protection is similar for each insurer, they also throw in handy little extras to sway you to them. You could call it marketing or bribery.
The benefits of getting Income Protection cover from each specific provider listed above, in brief, are:
So what you should be looking at:
âď¸ What does it cost? Remember to look at the number that shows tax relief.
âď¸ Is it Reviewable or Guaranteed? Generally, go with Guaranteed.
âď¸ Are the benefits the best you can get for your situation?
âď¸ Risky occupation? Class 3 (jobs like care assistant, nurse, electrician) or 4 workers (carpenter, plumber, etc.) should choose Aviva allll day eâ ery day. Youâll want their Wage Protector option, which is the only insurance of its type explicitly catered to help Class 3 and 4 workers to get a better deal. Itâs not as comprehensive as full income protection, but itâs affordable.
And thatâs it!
If you want a shortcut and itâs too late to become a YouTuber, I suggest asking a seasoned Income Protection broker to help you out. Of course, I mean me.
If youâve made it this far in this article, you can see Iâm a big fan of a no-bullshit approach to all of this. If thatâs your vibe too, you can get a quote by filling in the quick form here or by giving me a call on
Chat soon!
Nick
As Ireland's leading independent insurance broker, we specialise in comparing the rates and policies from the top five Irish life insurance providers and offering the very best value quotes to suit the individual needs of our clients. Our expertise lies in finding a suitable insurance plan for those with specific needs, be it a particular illness, occupation or claim history, we've got you covered in every sense!
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