Income Protection: How to Secure Your Financial Future
The Ultimate Guide to Income Protection.
Life is unpredictable, and an unexpected illness or injury could leave you unable to work. This is where income protection insurance becomes essential. At Ferris Financial Planning, we believe in securing your financial future, ensuring that you and your loved ones have peace of mind, no matter what life throws your way.
What is Income Protection?
Income protection is a type of insurance policy that provides a replacement income if you are unable to work due to illness or injury. It typically covers up to 75% of your income and continues paying out until you return to work or reach the end of the policy term, often up to retirement age.
Why Do You Need Income Protection?
Many people assume that their employer or the state will provide enough financial support if they cannot work. However, state illness benefits are limited, and employer sick pay schemes may only last for a short period. Income protection ensures that you can maintain your standard of living, cover essential bills, and focus on recovery without financial stress.
Key Benefits of Income Protection
- Financial Security – Replaces lost income due to illness or injury.
- Flexible Cover – Choose how much cover you need and how long you want it to last.
- Tax Relief – Premiums qualify for tax relief at your marginal rate, making it more affordable.
- Comprehensive Cover – Protects against a wide range of illnesses and conditions.
How Does It Work?
- Choose a Policy – Work with a financial advisor to select the right cover for your income level and needs.
- Set a Deferred Period – This is the waiting time before benefits start paying out, usually ranging from 4 to 52 weeks.
- Make a Claim – If illness or injury prevents you from working, submit a claim to your insurer.
- Receive Your Benefits – You’ll receive a regular income until you can return to work or reach the policy’s end date.
Common Questions About Income Protection
Q: Is income protection worth it? A: Yes! If you rely on your income to cover essential expenses, this policy provides vital financial security.
Q: Will I be taxed on my pay-outs? A: Yes, income protection benefits are subject to income tax, USC, and PRSI, just like a salary.
Q: Can I claim if I lose my job? A: No, income protection covers inability to work due to illness or injury, not redundancy.
Secure Your Future Today
At Ferris Financial Planning, we help individuals find the best income protection insurance tailored to their needs. Get in touch today email Richard@ferrisfinancialplanning.ie or call 087 772 9268 to discuss your options and secure your financial future!
