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💼 INCOME PROTECTION

Income protection — the cover most people don't have but everyone needs

Your ability to earn an income is your most valuable financial asset. Income protection insures it — paying up to 75% of your salary if illness or injury stops you working.

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What is income protection?

Income protection (also called income continuance) is a long-term insurance policy that pays a regular monthly income if you're unable to work due to illness or injury. Unlike sick pay from an employer — which typically lasts weeks or months — income protection can pay out until you return to work or reach retirement age.

Most people insure their car, their home, and their mortgage — but not the income that pays for all of these. If you couldn't work for 6 months, a year, or longer, how would you manage?

State illness benefit in Ireland pays €232/week — less than €1,000/month. For most people, this is nowhere near enough to maintain their lifestyle or meet their financial commitments.

The tax relief makes it more affordable than you think

Income protection premiums qualify for income tax relief at your marginal rate. For a higher rate taxpayer, the government effectively covers 40% of the cost.

Example — higher rate taxpayer:

Gross monthly premium€150
Tax relief at 40%−€60
Net monthly cost€90

Key features to understand

Benefit amount

Up to 75% of your pre-disability salary, minus state illness benefit. Paid monthly, taxed as income.

Deferred period

The waiting period before the policy pays out — 4, 8, 13, or 26 weeks. Match to your employer's sick pay period.

Own occupation

The best type — pays if you can't do your specific job, not just "any job". Ensure your policy uses the own occupation definition.

Policy term

Usually to age 65 or your planned retirement age. Premiums are lower if you choose a shorter term.

Indexation

Optionally, the benefit increases each year in line with inflation. Important for long-term claims.

Frequently asked questions

Is income protection the same as income continuance?+
Yes — income continuance is the term more commonly used in Ireland for the same product. Both replace a portion of your income if you're unable to work due to illness or injury.
What is the deferred period?+
The deferred period is the waiting time before the policy starts paying out — typically 4, 8, 13, or 26 weeks. The longer the deferred period, the lower the premium. Choose based on how long your employer would continue to pay you if you were off sick.
Is there tax relief on income protection premiums?+
Yes — income protection premiums qualify for income tax relief at your marginal rate (20% or 40%). This makes it significantly more affordable than the headline premium suggests. For a 40% taxpayer, a €100/month premium effectively costs €60/month after tax relief.
What if I'm self-employed?+
Income protection is arguably even more important for self-employed people — there's no sick pay, no employer cover, and no state safety net beyond illness benefit. Premiums are also fully tax deductible as a business expense.
Does it cover mental health conditions?+
Yes — most Irish income protection policies cover mental health conditions including stress, anxiety, and depression, provided you meet the policy's definition of being unable to work. This is a significant advantage over group sick pay schemes which often exclude mental health.
How is the benefit calculated?+
The maximum benefit is typically 75% of your pre-disability income, minus any state illness benefit you're entitled to. The net benefit is paid monthly and is taxable as income.

Get income protection advice

Income protection needs careful personalisation — occupation, employer sick pay, and income all affect the right policy. Our advisers will find the best fit for you.

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