Insure your Income

Protecting your income could be the best financial decision that employees and business owners will ever make.

When it comes to basic financial planning, insuring and protecting your income should occupy top spot in the list of priorities for anyone earning employment income.

The purpose of income protection is to prevent financial disaster to those struck down by a medium to long term illness, injury or disability.

When you think about it, it is your monthly income that pays for everything and average household bills and expenses in Ireland typically come to €40,000 annually. This includes mortgage & car repayments, rent, food and grocery, utility and energy bills, transport, leisure costs, tv and phone costs etc.

Mortgage protection is a death benefit only and does not cover mortgage repayments when income is lost through illness. Health insurance pays medical bills and does not provide an ongoing income. Life insurance is payable upon death.

Income protection insurance is a type of coverage that provides a replacement salary should you become unable to work due to any illness, injury, or disability. This income is effectively provided monthly by the insurance company.

Income protection insurance covers cancer, stroke, mental health issues, stress, musculoskeletal & orthopaedic illness, fractures, cardiac & neurological issues, and any conditions that prevent you from doing your job.

The average income protection claim in Ireland lasts up to 6 years and without income protection insurance, that could see a family scrambling to cover up to €250k in bills and expenses over that same period.

With adequate income protection in place at least a policy holder can concentrate on getting better and addressing the underlying health issue that prevents them from earning income, as opposed to also being burdened by a financial crisis.

For most people, it is their income that is their most valuable asset surpassing even pension, property and savings assets combined.

For example, an employee earning €45,000 annually and with 25 years to retirement has a minimum ‘ability to earn income asset’ of €1.125m. What value is your ‘ability to earn income

asset’ and have you thought about the financial consequences of losing the ability to earn income for any period longer than 6 months?

It is funny how we insure our cars, houses, holidays, laptops, mobile phones and even our pets, yet we neglect to insure the income that pays for all these things.

Part of the reason may be that income protection is not as widely know as life insurance for example. Not yet anyway, as income protection is rapidly becoming one of the most desired financial risk management products available in Ireland today and for those lucky enough to be eligible.

Income protection insurance is suitable for employees, business owners, sole traders, public & civil servants and can cover salary, commissions, bonuses and even pension contributions in the case of business owners.

Unlike life insurance, which is a death benefit, income protection insurance is a living benefit which is designed to protect against financial hardship whilst you are alive and right up until retirement if needed.

The ideal time to put income protection in place is when you are healthy and with no major pre-existing medical conditions. Like all insurance, you don’t need income protection until you need it! But should you become ill you will not be eligible for cover and premiums only become more expensive with age.

Income protection is most suitable for those aged between 30 and 55 and particularly those with dependants, outstanding mortgage and car repayments and the typical monthly bills and expenses.

Monthly payments on income protection policies are influenced by the amount insured, age, health, occupation, and retirement age of the policy holder. The riskier the occupation the more expensive the cost.

However, personal income protection is one of the very few types of insurance where tax relief at your marginal rate is provided on monthly premiums. The relief is claimed back annually and provided as an additional tax credit. So monthly premiums of €80 effectively cost just €48 monthly for someone earning at the 40% rate of tax. Here the government is effectively incentivising those earning income to protect that income.

For business owners, premiums on income protection policies can be treated as a tax-deductible expense. Should a business owner become ill and lose the ability to generate income for the company, then both the solvency of the company and its ongoing ability to provide an income to the business owner becomes seriously jeopardised. This risk can be easily mitigated by putting proper executive income protection in place.

Not all income protection policies are the same and with multiple variances in flexibility and features from one provider to the next, things can become confusing. This is where a market and product expert like MOJO Finance adds real value.

MOJO Finance:

Send enquiry to hello@mojofinance.ie for a call back: or, Receive a live Quote from the MOJO Finance website: or, Call (045) 938 206 or feel free to visit our office in Naas.

Insure your Income