Serious Illness Cover
This policy provides a lump sum if you are diagnosed with one of the illnesses covered by the policy. Approx. 86% of all claims arise from Cancer, Heart Attack and Stroke while other common illnesses covered include Meningitis, Cardiomyopathy, Multiple Sclerosis, Parkinson’s Disease to name a few.
Under this policy, the cover amount and the premium remain fixed for the duration of the policy.
This plan can be set up on a single, joint, or dual life basis.
Serious Illness Cover can be taken out as a policy on its own, or as an add-on to life insurance as an accelerated or standalone benefit.
Accelerated – this means that in the event of an illness claim, the life insurance amount is reduced by the illness claim amount.
For example I have a life insurance policy of €150,000 with accelerated illness of €50,000. If I am diagnosed with a serious illness as specified in the policy conditions, €50,000 is paid to me. My life insurance is now worth €100,000.
Standalone – this means that the life insurance amount is unaffected in the event of an illness claim.
For example I have a life insurance policy of €150,000 with standalone illness of €50,000. If I am diagnosed with a serious illness as specified in the policy conditions, €50,000 is paid to me. My life insurance remains at €150,000.
Top Tips:
- Check to see if your Serious Illness benefit is accelerated or stand-alone.
- Make sure your illness benefit is enough to support you and your family in the event that you cannot work due to diagnosis of a serious illness
- If your Serious Illness benefit forms part of your Mortgage Protection, make sure to check if it is a fixed cover amount or if it is decreasing.
Income Protection
This policy pays a replacement income to you if you are unable to work at your usual occupation due to illness or injury.
The maximum that you can insure is 75% of your annual earnings, less any entitlement to the state disability benefit.
At policy set up, you choose your deferred period. This is the length of time you must wait before a claim can be submitted, and ranges from 4 to 52 weeks.
For personally owned plans, premiums are subject to income tax relief at your marginal rate. For employer-paid policies, premiums are tax-deductible expenses. Please note that all income received under the policy in claim is subject to income tax.
In the event of a claim, the benefit is paid to you until you return to work or reach your retirement age.
Under Employer-paid policies, pension contributions can also be covered.
Example:
Ciara is a company director and has a salary of €60,000. The company contributes €1,000 to her pension each month.
Ciara decides to set up an Income Protection policy. As she is self-employed, she is not entitled to the State disability benefit so she can insure the maximum amount of 75% of her earnings – €45,000 + €12,000 to cover her pension.
She chooses a deferred period of 13 weeks as she has enough savings put by to get her though 3 months in the event that she could not work.
In 5 years time, unfortunately Ciara was involved in a car accident and can no longer work at her current job. After 13 weeks, her replacement income kicks in. Ciara is now receiving €45,000 per year and €1,000 is being paid to her pension each month. This payment will continue to be paid to her until she returns to work, or she reaches age 65.
Tips:
- Check the deferred period on your Income Protection policy.
- Make sure the cover amount is high enough to support you if you could no longer work.
- Make sure you are not over-insured. Sometimes, especially if there is Inflation Protection built into your plan, or your situation has changed, your cover amount may be significantly higher than your current salary. This effectively means that you could be paying for a benefit you may never be able to claim.
- Don’t forget to claim your tax relief.
Cancer Cover
Unfortunately, if you already have an underlying illness such as diabetes or multiple sclerosis, it might be difficult for us to secure Serious Illness cover or Income Protection for you.
However, there is a policy that will pay a lump sum if you are diagnosed with cancer and this is a good alternative for people who may not be able to take out Serious Illness cover due to an underlying medical condition.
The cover amount, and the premium remain fixed for the duration of the policy.
This plan can be set up on a single, joint, or dual life basis.
This can be added on to your life insurance policy or treated as a stand-alone policy.