In simple terms, income protection is a way of making sure you and your family have a financial cushion if you need it.

Like most people, you probably insure your home and your car against the unexpected. If you have a pet, you probably insure that too.

But what about your income?

When life is going well, it’s easy to take money for granted. It pays the bills and lets you take care of your family, enjoy your home, car, hobbies, and holidays. Your income is essential to your quality of life.

What if you were to have an accident or long-term illness that prevents you from earning a living? That’s where income protection comes in. It gives you an alternative income while you’re unable to work. It’s different to health insurance – it’s insurance for daily living. When illness or injury leaves you unable to work, income protection gives you financial security. It means you can keep on top of the bills that matter: mortgage payments, car loans, food bills, rent and more.

How much do I need?

To work out how much income protection you need, you should ask yourself these questions about what would happen if you’re unable to work due to illness or injury:

Think about your income…

Are you an employee or company director? Check what – if any – sick pay arrangements your employer has in place for you.

Are you self-employed? Your business may continue to generate income in the short term, but there will be an impact in the long term.

Will you get state benefits? You may be entitled to the State Illness Benefit for a limited period. As of March 2019, that’s €203 a week but how far will that stretch?

Do you have savings and investments? If you have a nest egg tucked away, you may be able to rely on that for a while. But how long will it last?

Think about your outgoings…

Your home. How will you continue to pay your mortgage or rent?

Bills and loans. You’ll still have to pay bills like gas, electricity, food, loan repayments and so on.

Your lifestyle. You may have costs like school fees, holidays or entertainment you’ve already committed to. Will you be able to reduce these costs at all?

Unexpected costs. If you’re unable to work, you may find yourself facing extra costs like larger heating bills, higher phone bills and medical or transport costs.

How does income protection work?

If you can’t work because of illness or injury, your income protection plan gives you a replacement income until: you return to work, or your chosen retirement date if you’re not fit to return to work before then.

To speak to someone about an income protection plan to suit your needs and budget call us on 07491 16019 or email info@reynolds.ie