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Income Protection Insurance Cover

Income Protection Explained

what does income protection do?

“What happens if I get really sick?”

Guess how many paid sick days you’re legally entitled to every year?

Count them.

Five measly days!

Most employers are fairly sound and they’ll cover you for extra days, but it’s rarely more than a handful.

So what’d happen if you were hit by a car or broke your leg really badly or suffered an illness that kept you out of work for months or even years?

Would your savings be enough to get you by? Could you live on the government’s Illness Benefits that maxes out at €232 weekly (and you only get this for two years!)?

If you’re single and don’t have any kids, you could probably get by.

But it’s looking a bit hairy if you have a family to support.

Income Protection can solve that problem by paying you up to 75 percent of your salary if you’re unable to do your job because of ANY sickness, disability or injury.


Why do you Need Income Protection Insurance?

If you’re lucky to work for a big tech company, you’ll probably have Income Protection (aka Salary Protection aka Income Continuation Insurance) thrown in as part of your benefits.

Yes, imagine having benefits included on top of your base salary.

It’s Mark Zuckerberg’s world, baby, and we’re all just living in it.  

If you’re a mere pleb like myself, you’ll have to stump up for Income Protection on your ownio because your sick pay is crap or non-existent.

However, income protection cover is well, well worth it.

For one, you don’t have to die for it to come in useful.

Numero dos, it’ll pay your bills and your rent when you can’t.

Agus uimhir a trí, it’ll cover you until you get back to your job or RETIRE. That could be several decades of cover, if necessary.

That said, I’m getting ahead of myself. First things first: income protection is a type of insurance that pays up to 75 per cent of your salary if you’re out of work due to any disability, injury, or illness.

In straightforward terms, if you can’t work FOR ANY REASON (with the exception of redundancy), the insurer will pay you a replacement salary of up to 75 per cent of what you were earning.

Presumably, you can see why that would be useful.

Is it worth getting Income Continuation Insurance?


Seriously. That’s it. Trust.

However, that’s probably not nearly enough information to make you part with your hard-earned moolah.

Think of all your expenses. Rent/mortgage. Bills. Wi-fi. Fun stuff for you. Nice things for your other half. Plastic crap for your kids if you have them.

How do you pay for all of that?

With your income!

Unless you’re the heir to an oil conglomerate, in which case you can take your man Zuckerberg with you and go find some other corner of the internet to explore.

Would you be able to afford your life if your income dried up? Of course, you wouldn’t. Say goodbye to holidays and past-times and actually enjoying life.

You might think there must be some kind of government dig-out to help you if you can’t work long-term. Sure, that’s why you pay all those taxes, right?

Well, the State’s Illness Benefit is €220 a week, which is grand if you’re about 20 and live at home. It’s not so grand if you have to pay for food, bills, and rent. That €220 a week is €953a month. There are ‘cosy, modern’ bedsits (read: tiny rooms in which you can make your dinner from your bed) in Dublin that cost more than that.

A big NB to all you fellow self-employed readers, WE DON’T EVEN QUALIFY FOR ILLNESS BENEFIT. We get nada.

Income Protection for Company Directors

Income protection for the Self Employed (and Freelancers)

Income Protection for Engineers

Income Protection for Salespeople

If you’re in public service, you should full sick pay for three months and then half pay for a further three months.

Income Protection for Nurses

Income Protection for Teachers

And we haven’t even considered that you might have kids, who are the greatest money-suck of all time. Just try telling little Johnny that Mammy has no money to pay for his football kit. It’s like putting water on a gremlin.


And sure there’s an argument to be made that the government are stingy and should cough up more than €203 a week for the Illness Benefit, but it is what it is.

All that said, you can see why an income protection policy could come in handy.

How Does Income Protection Cover Work?

A refresher: income protection pays up to 75 per cent of your salary if you can’t work for any reason – either until you can go back to work or you retire and unlock your pension fund.

Income Protection has a ‘clause’, if you will, called the deferral period. This period states how long you have to be out of work before your insurance kicks in. The deferral period is one of 4, 8, 13, 26, or 52 weeks. The shorter options are more expensive, while a 52-week deferral period would be considerably cheaper.

However, you have to be realistic here. Could you survive 52 weeks with no income?

To give you a quick example, 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 pays your rent and bills and all that other life stuff.

What does that look like in cold, hard numbers on the suggested salary of €50,000?

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.

An extra fun fact, the average income protection claim in Ireland is about five years. If you were out of work for five years, that’s €2,288 x 60 = €137,280. 

You can see how massive a difference that would make—basically, financial ruin or not. Little Johnny would be delighted that Mammy bought that income protection plan.

How do you Claim on Income Protection?

Check your deferred period – this is the period of time you must be unable to do your job before your income protection payments begin.

If you’re likely to be out of work longer than your deferred period, you should contact your insurer:

Deferred Period Time to notify the insurer after illness / injury begins
4 weeks 2 weeks
8 weeks 4 weeks
13 weeks 8 weeks
26 weeks 13 weeks
52 weeks 26 weeks

What the insurer needs

To assess your claim,  the insurer needs some basic details from you

  • Name
  • Policy number
  • Details of your illness
  • Date you last worked

The insurer will send you:

  • Claim form (you complete)
  • Medical Certificate (your doctor completes)

Financial requirements

To assess your claim, the requirements differ if you’re an employee, company director or self-employed


  • Copy of your P60
  • 3 recent payslips before ceasing work

Company Director

  • Copy of your P60
  • 3 recent payslips before ceasing work
  • A copy of the company accounts for the last 3 years
  • Copy of your Income Tax assessments for the last 3 years

Self Employed

  • A copy of your certified accounts for the last 3 years
  • Copies of your Income Tax assessments for the last 3 years

Read | Income Protection for Small Business Owners

Once the insurer makes a decision on your claim, they will pay your benefit electronically to your bank account.

All claimants in receipt of payments are subject to ongoing regular medical and/or financial review – the insurer will contact you for any information they require when reviewing your claim.

Income Protection or Serious Illness Cover?

I want to touch on this briefly while I have your attention. If you’re looking into arming yourself with information on Income Protection, you’ve probably also come across Serious Illness Cover on your travels. It’s also sometimes called Critical Illness Cover or Specified Illness Cover.

Income Protection or Serious Illness Cover.

It’s basically a type of insurance that pays out a lump sum if you fall ill with one of the illnesses specified in your cover. It’s cheaper than Income Protection, but it also has a bit of a reputation for being tricky in how it classifies the illnesses it covers.

For example, one type of heart attack might be covered while another may not. Which is to say you could pay for cover and get ill but not get any payment because your illness doesn’t meet the specifications of the policy.

So while it’s a good bit cheaper, I really recommend paying extra for Income Protection. Wincome Protection, if you will. Because…winning. Am I cool now?

In short, if you can’t afford or get Income Protection, Serious Illness Cover will cover most of the awful diseases that that might leave you out of work (heart disease, stroke). However, Income Protection is much more well-rounded and a better option.

Even shorter – think of serious illness cover as Third Party Fire & Theft while income protection is Fully Comprehensive.

What Illnesses does Income Protection cover?

All of them.

It also covers musculoskeletal (fancy way of covering back/joints/muscles) and mental health issues or random things like tripping over the kerb and smashing your face to bits.

Just so we’re clear: Income Protection covers you for any illness, injury, or disability that stops you doing your job. This could be a bout of depression or a bad back.

It doesn’t cover redundancy.

What is excluded from Income Protection?

There are some 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. (As in: you can’t have a baby and decide the insurer is gonna pay your wage for you, indefinitely.)
  • War.
  • Failure to follow medical advice.

There are others that are specific to each insurer so be sure to check the T&Cs before you apply. Here are a few to keep an eye on

  • Both Royal London are Irish Life exclude “dangerous”pastimes like climbing and scuba diving. Other insurers are cool with these.
  • If you’re awarded compensation from the Courts, Aviva will reduce your payout by a the “weekly-ised” amount of this payout.
  • Irish Life makes you foot the bill for any medicals required. They also carry out spot checks when you’re out on claim.
  • If you don’t take part in Irish Life’s Career Change Programme, they can stop paying your claim
  • Aviva won’t pay out for “symptoms of disabilities derived solely or principally from a mental or psychological state (other than anxiety, depression, directly related to stress, anxiety, depression, mental or nervous disorders).

How Much is Income Protection monthly?

Ah yes, the big question.

How much does Income Protection cost?

So you understand that Income Protection is useful and why you could potentially see yourself stumping out your cheese for it every month.

However, the amount you’ll pay is a consideration.

Again, let’s look at an example of how income protection cover amounts are calculated:

Same as before: you earn €50,000 a year, and you want to insure the full 75 per cent. You don’t smoke, and you work a desk job. You want to be covered up until 65; you’re currently 40. The deferral period is 13 weeks. Your income protection insurance quote would be the following:

Income Protection Quote

The number on the right is how much you’d be paying. That’s about €15 a week.

By the way, if you read the words underneath the price, you might be wondering what ‘guaranteed’ and ‘reviewable’ mean. ‘Guaranteed’ means your rate will stay the same (i.e. it’s better for you long-term). In contrast ‘reviewable’ means the insurer can review your policy and potentially increase the cost.

I suggest you go with a ‘guaranteed’ policy especially in light of COVID19. Will the insurers use that as a reason to increase premiums on review? I wouldn’t give them the chance.

Is Income Protection tax Deductible?


See that quote above? The left column shows the raw cost. The column on the right shows the monthly premium after income tax relief.

You get tax relief on your Income Protection premiums at your marginal rate. (That’s one of those sentences you often see written down that has a lot of words in it that you sort of know but don’t necessarily understand.)

Your Income Protection premium (i.e. the amount you pay) is applicable for tax relief at the same rate as your income (20% or 40%).

In short: you’ll pay less money for your premium because of tax relief. However, the tax relief on your salary protection isn’t given at source so you’ll need to pay the full amount and claim the money back yourself as a tax refund in your annual return.


Which Income Protection is Best?

In Ireland, five insurers offer Income Protection:

All the policies/insurers fall roughly into a ‘same-same but different’ approach. The core product remains much the same, though some plans will be Reviewable while others will be Guaranteed. Other factors will also differ: for example, Irish Life cover up to age 65 while Royal London stretches to 70.

Aviva’s policies come with Best Doctors Second Medical Opinion and Aviva Family Care, while Irish Life has ‘LifeCare’. Royal London, on the other hand, has a back to work benefit, a split deferred benefit, and a terminal illness benefit all included with its Income Protection plans. Lastly, New Ireland has a daily hospital money benefit and a useful ‘essential activities benefit’.

Your best bet is to take a look at the policy documents for each insurer and to decide what’s important to you based on your income, wages and the benefits on offer to suit your own personal financial situation. If that sounds like an awful lot of hassle, you can ask me to do it for you. It’s what I do!

To make things easier for you, here’s a rundown of the benefits:

Aviva Income Protection:

  • Ireland’s longest-running provider. They’ve been around ages, they’ve paid a load of claims and they’re not going anywhere.
  • Leading rehabilitation and retraining programmes to help get you back to work.
  • You can get 20 per cent more cover in the future without underwriting.
  • Cover continues if you change jobs.
  • Free family counselling services.
  • Free 2nd Opinion Medical Service from Best Doctors.
  • 4,8,13,26, and 52 weeks deferred periods
  • Ceasing age 70

Royal London Income Protection:

  • Price match to guarantee the lowest premium.
  • Best’ back to work’ benefit.
  • Dedicated Nurse advisor.
  • Pays up to age 70, instead of 65.
  • 20% increase allowable every 3 years.

New Ireland Income Protection:

  • Confirmed income options. This fixes your pay-out even if your income falls. (For example, everyone in your company takes a 20 per cent wage cut. However, your payout is based on your original salary, before the 20 per cent cut.)
  • Back to Work Benefit.
  • Terminal Illness Benefit.
  • If you become self-employed or a sole trader, you can switch to a company-paid policy.
  • Best for indexed policies.

Irish Life Income Protection:

  • LifeCare benefit.

How long does Income Protection last?

As long as you’re out of work or until the ceasing age of your policy or until the end date of your permanent part-time or full-time employment contract – whichever comes sooner!

As I said above, Irish Life and New Ireland can cover you up to age 65 while Royal London and Aviva can stretch to 70.

Can you Work While you’re on Income Protection?

I mean you could, but it’d be a bad idea. Income Protection is intended as a replacement income if you can’t work due to illness.

So the act of working while receiving Income Protection could get you in trouble – especially if you’re also claiming any benefits from the State.

However, you can work a different job with the blessing of the insurer. The policy provider will reduce your payment in line with the income you receive from your new job.

Can you Have two Income Protection Policies?

If you want. You can have three or four or 16 if you really want to, once your total cover isn’t more than 75 per cent of your income.

Generally, this won’t apply to most people. Why would you want the hassle of all that paperwork and money management?

This tends to apply if you have a policy through your employer that maxes out before the full 75 per cent and you want ALL the cover. For example, let’s say you’re a tech bro, and your company covers up to 50 per cent. You could take out a second, personal policy to make up the last 25 per cent.

What is the Maximum Income Protection Benefit?

I’ve mentioned it up above, but the maximum you can insure is 75 per cent of whatever your earnings are at the time you take out your policy. From this, the insurer subtracts any other income you get while out of work, such as sick pay or social welfare.

So it’s: (75% of your salary) – (sick pay or social welfare payments).

Yes I know typing it out in the form of an equation makes it look much fancier (ooh la la, an equation) but it’s actually pretty straight forward.

Insofar as capping out at a certain number (e.g. how big of a salary can you cover?), Aviva caps out at €350,000. If 75 per cent of your typical salary is €350,000, you’re clearly doing alright.


How is Income Protection calculated?

Up above, I gave you a simple equation to see how much a potential Income Protection payment would be. However, that’s not quite the same as looking at how the cost of Income Protection is calculated.

Everyone’s policy will be a little different, down to their unique circumstances or the amount of cover they need. It’s why I always say you shouldn’t just go straight to the cheapest cover or get the same protection that a friend of yours has. IF JIM JUMPED OFF A CLIFF…?

The goal is to find the insurer (and policy) that matches best with you and what you want from your cover.

One of the significant factors in calculating the cost of Income Protection is the job you do. Obviously, if you do something dangerous, the chances of needing time off work increase exponentially. Bull runner. Bomb squad. International spy.

G’luck getting Income Protection then. Idk, maybe your spy organisation can sort you out, though I am but a humble broker with no clients in that field.

Job types break into four classes. These classes strongly weigh how much your premiums will be.

  • Class 1: Desk jockey. Like me. Anything where you’re sat down all day, mostly.
  • Class 2: Light manual labour. A sales assistant or a dentist. You’re on your feet, though your life isn’t in any danger. Probably.
  • Class 3: Skilled manual labour, such as nurses, midwives, and mechanics. If something goes wrong on your day job, it could get messy.
  • Class 4: Heavy-duty manual labourers such as builders or tradesmen.

In Class 1, if something were to fall over, it’d probably equate to spilt Tippex. In Class 4, if something were to fall over, it could be a lump of brick on your head. Let’s hope you wear your hard hat.

People with occupations in Class 1 and 2 should find it reasonably easy to get cover. For those in Class 3 and 4, it can be trickier.

Which leads nicely onto:

Aviva’s Wage Protector

Regular Income Protection can get verrrrry pricey for Class 3 and 4 workers, so Wage Protector is intended as an alternative. Wage Protector is Aviva’s.

The definition is essentially the same (covers up to 75 per cent of your salary). However, the terms are a little different.

Ici. (French is just so much prettier than English, non?):

  • Months 1 to 24 out of work: You’ll be paid a replacement income for 24 months. (Whereas Income Protection covers you until your retirement or return to work.) 
  • After 24 months: Continuing cover if you can’t go back to work after 24 months. To qualify for the continuing payment, you have to pass a set of physical and mental ability tests. I’m not going to lie, you have to be severely incapacitated in order to get a payment after 24 months.

You can see that the big difference is you’ll be paid a replacement income for two years, and then if you need more time, you’ll be applicable for two more years subject to those tests.

Income Protection for the Self-Employed

Friend, if you are self-employed and you don’t have the luxury of an Income Protection policy to fall back on, I’m going to request that you hold two slices of bread up to your face, a lá Gordon Ramsay, and repeat the phrase ‘Idiot sandwich’ a couple of times at yourself in the mirror.

Is that harsh? Yes.

But I say this as a fellow self-employed person. Being self-employed is already hard enough without leaving a gaping hole in your business and personal life if you were out sick for more than a few weeks.

Take this advice as if I’m Yoda and you’re Luke Skywalker training to be a Jedi.

Take out Income Protection you must.

Poor, otherwise you will be. Hmmm.

Can You Get Income Protection When Chaging Jobs?

You can indeed – we discuss that here.

But if you already have a personal income protection policy, it remains effective even if you change occupations!

What’s the Process for Getting Income Protection?  

It depends how much cover you’re applying for. Of course, there’s also a caveat here if you have a complicated medical history.

If you’re in good health, you can apply online and off you whiz. The general limits are:

  • If you’re under 35, you can apply for up to €1,000 cover per week without having to do a nurse medical.
  • Under 40, you can apply for up to €900 per week without a medical.
  • Under 45, up to €800.
  • Under 50, up to €700.
  • Under 55, up to €500
  • And under 60, you can apply for up to €400 Income Protection per week without having to do a medical.

If your cover is below the limits above, you can get cover based on an application form alone assuming you’re fit as a fiddle. If you have any medical issues or if you need more cover than the above, you’ll need to do some combination of paperwork, a screening, or a visit to your GP.

If you want to know how much an Income Protection plan would be for you, hop over to my quote machine for a rough guide.

If you’d like me to make a recommendation and send you a quote for Income Protection to help you get the best policy (and price) for you, please complete this short questionnaire. I’ll get back to you asap. 

Alternatively, you can give me a call on , and I’ll be happy to chat.

At Lion Life Insurance, we’re an online broker so we can arrange everything for you over the internet if you like. However, we’re always happy to chat over the phone too. We specialise in getting cover for health issues or quirky medical conditions, so fear not if you tick that box.

We also really value a ‘no-bullshit’ approach and believe in stellar customer service. But don’t just trust us: check out any of our 1,000 reviews from a growing army of happy customers.

And we didn’t even have to bribe them…

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Here’s the income protection questionnaire again (just in case).

I’ll have a NO OBLIGATION recommendation over to you tomorrow!

Chat soon




Benefits of Income Protection with

income protection

  • A replacement income of up to 75 percent of your salary if you can’t work, up until you retire or go back to work.
  • You can choose your own deferral period (how long until cover kicks in) based on 4, 8, 13, 26, or 52 weeks. For most people, 8 or 13 weeks is a good shout.
  • You get tax relief on Income Protection at your marginal rate – so that’s another few quid knocked off the price.
  • Additional, optional benefits include career change programmes, Care Pathway rehab services, access to physiotherapy or counselling.
  • As an independent Irish broker, I’ll give you unbiased advice on which policy is the right one for as I work with all the insurers

How much will it cost to insure my income?


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That hurts maaaaan.

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Buying life insurance can be a frustrating experience. Our mission is to make buying a life insurance policy on the Irish market easier:

  • We’re on online insurance broker so we can arrange everything, including the signing of your documents over t’internet.
  • We specialise in getting cover for people with chronic health issues or a quirky medical condition.
  • We’re a trusted broker giving you advice on a choice of policies from AvivaIrish Life, New Ireland, Zurich Life and Royal London. That’s all five of the main Irish insurance companies. You won’t get kind of variety that from a bank or any one insurer.

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