Income Protection for Office Workers | Has it hit you yet?

How to Protect your Salary if you Work at a Desk?

Back in the day, it seems that office workers lived in a veritable minefield.

Every day they ran the gauntlet getting to and from work.

Watch any movie from way back when it’s easy to believe that being hit by a falling piano was an everyday risk. There were open manholes, men delivering huge sheets of glass, banana skins on the pavement, and distracted bus drivers breaking red lights.

Proper carnage on the streets.

It’s not raining pianos anymore, but you never know what could blindside you.

What would you do if you were hit by the modern-day equivalent of a falling piano and couldn’t earn a living in the same way you do now?

I hope you’re sitting down.

Ready for this? You’re not entitled to ANY sick days from your employer (although they may cover you for a few days out of the goodness of their heart). The government’s illness benefits might stretch to €203 a week (and only for up to two years), but is that enough?

No.

No, it’s not.

And, horror of horrors, but no great surprise, if you’re self-employed, the government won’t even give you that, for some unknown reason.

You need income protection insurance which will pay you up to 75 per cent of your salary if you’re unable to do your job because of ANY sickness, disability or injury.

Phew.

That should cover the rent or mortgage, essential bills and pizza every Friday right up until you retire or get your job back, no matter how long that takes.

Deadly or wha?

Yeah but what are the chances?

Of being hit by a falling piano? Pretty low.  Of falling ill or having an accident? Not as low as we’d all like to think.  It’s a big “what if”, but what if something happened?

Do you have enough savings?

Could your partner cover your loss of income?

Would you have to move back with the parents?

As long as you live under my roof, you’ll do as I say, d’ya hear me!

Are you scared now?

Don’t be.

Income protection insurance is pretty easy and quick to arrange and isn’t expensive, but the peace of mind it brings is priceless.

How does Income Protection for Office Workers, eh, work?

Office workers like us don’t face the same risk as manual workers. The worst we’re going to experience is a paper cut (ouch) or maybe backache from sitting for too long. For this reason, the insurers offer us lower premiums than, say, a carpenter.

The insurers call us Class 1 Workers. Here are some examples of Class 1 Workers:

• Software Developers and Engineers
• Web Designers
• Accountants
• Civil Servants
• Administration
• Barristers
• Civil Engineers
• Company Directors
• Graphic Designers
• Solicitors
• Project Managers
• Systems Analyst and Programmer
• IT Professionals

And so on.

If you work at a desk, whether in the office or at home, you are a Class 1 worker and get the lowest price possible.

Feel free to feel smug next time you’re chatting to someone who does real, hard work for a living 🙂

Where’s the Catch with Income Protection?

Every policy has a deferral period which is the length of time you have to be out of work before your insurance benefit kicks in. The deferral period can be 4, 8, 13, 26, or 52 weeks. The shorter options are more expensive, while a 52-week deferral period would be much, much cheaper. But could you survive 52 weeks with no income? No, me neither!

Here’s an example from an earlier blog I wrote: let’s say you earn €50,000. Your deferral period is 13 weeks. You get hit by a car on the way to work. It’s terrible and awful, but you survive, thank God or Odin or Lady Gaga.

After the 13th week, your payment kicks in to save the day. And you get to pay your rent/mortgage and keep a roof over your/your fam il’s head.

What does that look like in cold, hard numbers?

• 75% x €50,000 = €37,500
• €37,500 – €10,556 (State Illness Benefit) = €26,464

Once cover kicks in, the insurer will pay you €2,288 a month until you can go back to work. If eligible, you’ll also get illness benefit (but remember, if you’re a self-employed sucker, you get nada from the state) bringing your total income up to €37,020.

The average income protection claim in Ireland is about five years. If you were out of work for five years, that means a loss of income of €2,288 x 60 = €137,280. Now you can see how massive a difference that would make – basically, financial ruin or not.

More not-quite-catches are the exclusions that the various insurers run with. For example:

• Pre-existing medical conditions you were aware of before taking out a policy are not covered.
• Disabilities or illnesses occurring as a result of a criminal act, alcohol or drug abuse.
• Self-inflicted injuries.
• Healthy pregnancy and childbirth (you can’t have a baby and decide the insurer will pay your wage for you indefinitely).
• Some insurers exclude “dangerous” pastimes like climbing and scuba diving – make sure you disclose these pastimes when you apply. Otherwise, you may get quite a shock when you return from Chamonix in a wheelchair to make a claim.
• Others are specific to each insurer, so be sure to check the T&Cs before you apply.

Oh yeah, Income protection insurance payments are tax-deductible, so if your monthly premium is €100 per month, you can claim back 40% of that FTW!

How Much Does Income Protection Cost an Office Worker?

The big question!

Income protection for office workers is cheap as chips.

You’re looking at 1% of your net monthly income to guarantee 75% of your income should you fail to avoid that piano.

1% for 75% – seems fair, no?

If you want bang-on accurate income protection for office workers quotes, head over here and knock yourself out.

Over to you…

If you’d like to know about how to stay afloat financially, even if if a piano hits you on the noggin, complete this questionnaire, and I’ll be right back with a recommendation.

Or if you’d prefer a quick chat first, please schedule a call here or give me a buzz on 05793 20836

Thanks for reading.

Chat soon!

Nick