What Happens to Income Protection if You’re Dismissed?

Hello reader friend, here’s a question from a fellow reader:

Hi Nick. Just reading about Income Protection and I believe they all work lovely if your employer doesn’t let you go while you’re sick. Which I think is not forbidden by law and probably happens? Except the big companies where I can imagine your contract might guarantee that you’re not going to get sacked while seriously ill (and self-employed who of course won’t do that to themselves). How likely is that your hard-earned and paid premiums will do the trick and keep you afloat? Cause if you’re let go the insurer won’t continue to pay you, correct? What happens to income protection if you’re dismissed? Trying to see if there is something there I might not be aware of… Appreciate you sharing your knowledge (and sense of humour) 🙂

If you ever had to take extended sick leave but had the smarts to sort out your income protection before the shit hit the fan, you probably felt an abundance of relief.

Even if you never had to claim, the knowledge that you would be OK financially is priceless.

But what would have happened if your employer had given you the boot during your sick leave?

Should that be a concern?

Can you even be fired if you are on extended sick leave?

Unfortunately, the answer is more complex than a quick yes or no.

But, if you do want the simple answer:

Well, yes, your employer can technically dismiss you from their employment even if you are on official sick leave.

How Can You Be Dismissed On Extended Sick Leave?

Look, it’s not fair, but it is possible that you get canned even if you are taking extended sick leave and are receiving income protection payments.

However, your soon-to-be ex-employer has to be meticulous if they decide to take this route.

An unfair dismissal lawsuit is not something any business wants to land on its doorstep.

The Unfair Dismissals Act doesn’t stop you from being dismissed,  it just lets you appeal the dismissal.

If your employer can prove you are incapable of fulfilling your role, then yes, you can lose your job.

The late Richard Grogan explains this issue much better than I ever could in this piece

How Does An Employer Prove You’re Unfit For A Role?

Our friendly neighbourhood medical professional is usually an employer’s go-to secret weapon when they want to prove an employee is incapable of fulfilling the role they were originally employed to carry out.

For example, Paddy works in a well-respected boat yard where he helps fix up local fishing boats.

Unfortunately for Paddy, some heavy piece of machinery (use your imagination here, but I’m thinking of a giant rusting anchor covered in barnacles and whatnot) falls on his legs, and he sustains some serious damage.

Naturally, Paddy has to take time off work to heal and recoup, but his employer is pretty sure that the damage to his legs will make it impossible for Paddy to navigate the work he was employed to do.

So, Paddy’s employer brings in an external doctor to assess his condition.

They agree that Paddy won’t regain the feeling of his legs.

So it wouldn’t be safe for Paddy to continue working in his previous role.

Now, his employer isn’t a bad auld skin.

He doesn’t want to leave Paddy in the lurch. So, he offers him either

a) another role that’s a little less physical or

b) the door

This kind of dismissal seems to be legit (but this is where I say don’t take legal advice from a man who has just scoured the internet for a gif of Captain Birds Eye)

And the same goes for a long-term illness that means an employee will never be able to return to work.

That being said, an employer cannot dismiss an employee who has been on extended sick leave just because they decide that this extended ‘holiday’ is the same as the employee resigning.

That route will land an employer in a whole heap of trouble and the ex-employee with a tasty amount of compensation.

What Happens To Income Protection If You’re Dismissed or Lose Your Job?

Although employers are all about the bottom line, you’ll be surprised, shocked, stunned and also a little bit agog when you hear some income protection providers are much fairer.

But this is why you should take great care when choosing an income protection provider.

Because most insurers will continue to pay your income protection payments even if you lose your jobwhile out on an income protection claim.

Not only does salary protection insurance guarantee a replacement income, but even if it turns out that your employer is a tight-fisted, cruel-hearted peace of shite, you won’t be left in the gutter watching your savings slowly dwindle to zero.

However, not all insurers.

Some will have small print they hope you’ll skim over that clearly states a cut-off in income protection payments if you lose your job during your sick leave or if your company ceases to trade when you are out on a claim.

Not ideal.

So, you must be vigilant when choosing your income protection provider.

Over To You…

I get it.

Thinking about a future illness isn’t easy nut imagining a future with no money is even scarier.

You’re sitting there thinking, “it’ll probably never happen to me”, and you’re probably right.

The odds are in your favour.

But you are gambling that you won’t face a period of extended sick leave in the next 30 odd years, that’s 360 months of good health, that’s waking up and going to work for 1440 weeks straight or 10,080 days.

The most heartbreaking phonecalls I take are the ones that start with a plaintive:

“Nick, do I have income protection or serious illness cover.”

They’re heartbreaking because

1. Usually the caller (or their patner) has just been diagnosed with some horrible illness and have no financial safety net.
2. I blame myself for not pushing income protection harder.

By the way, the struggle between coming across as a pushy sales guy trying to make a buck and someone who cares about you is REAL.

I guess that’s why I blog so much – it gives you the tools to decide to buy income protection before you even contact me.

Now, if this sounds like you, don’t worry; I’ve got your back.

Mise and my expert team eat, breathe, and sleep protection.

We want to help you get the very best deal for your needs.

We want you to be fully protected should the shit hit the fan.

I mean, it’s our job, and we’re really proud of how bloody good we are at it.

Yes, I’m bragging, but I don’t care.

It’s the truth. (1695 5 star reviews but who’s counting)

So, if you need a little helping hand or have a few questions we’re hear to help.

If you like a good old natter on the telephone, you can catch us here on 05793 20836.

Or you can schedule a callback here

If you’re a little more people shy and would rather avoid an actual conversation, don’t worry; I’m an introvert sympathiser, email me directly at nick@lion.ie

OR finally, (so many options!) complete this income protection questionnaire, and I’ll be right back with a no-obligation recommendation and some quotes.

Thanks for reading

Nick