In Ireland, the ability to earn an income is fundamental to maintaining one's standard of living and supporting loved ones. However, unforeseen circumstances such as illness or injury can disrupt this ability, leading to financial strain. While Irelands state benefits provide some assistance, they may not suffice to cover all expenses. For instance, the new Pay-Related Benefit scheme, effective from March 31, 2025, offers a maximum weekly payment of €450 for those with a strong work history and PRSI contributions*. However, this amount may not fully replace the income of higher earners. This potential gap underscores the importance of Income Protection Insurance, which serves as a financial safety net during challenging times.​

What is Income Protection Insurance?

Income Protection Insurance is a policy designed to provide you with a regular income if you're unable to work due to illness or injury. Unlike other forms of insurance, it doesn't cover redundancy but focuses on health-related work absences. In Ireland, this type of insurance is sometimes referred to as 'permanent health insurance' (PHI), though it's distinct from private health insurance . To be eligible, you typically need to be in full-time paid work or self-employed.​

Benefits of Income Protection Insurance

The primary benefit of Income Protection Insurance is the financial security it offers during challenging times. If you become unable to work due to illness or injury, the policy provides a regular income, ensuring you can continue to meet essential financial commitments such as mortgage payments, utility bills, and daily living expenses. This support allows you to focus on recovery without the added stress of financial strain.​

Consider the experience of Enda O'Flaherty, a valued client of Dolmen Insurance:​

"When I suddenly became unable to work, my mortgage and bills still kept coming. Thanks to Aine and the team at Dolmen, my income protection policy allowed me to weather the storm."​

Enda's story underscores the peace of mind that comes with having a safety net in place.​

How Income Protection Insurance Works

Upon taking out an Income Protection policy, you agree to pay regular premiums. In the event you're unable to work due to illness or injury, after a predetermined waiting period known as the 'deferred period,' the policy begins to pay out a portion of your income. This deferred period can vary, typically ranging from 8 to 52 weeks, and is chosen at the outset of the policy. The payments continue until you can return to work or until the policy term ends, often aligning with retirement age.​

For example, if you earn €60,000 annually and opt to protect 75% of your income, you could receive up to €45,000 per year, less any social welfare benefits . This ensures that even during periods of ill health, you can maintain a significant portion of your standard of living.​

Choosing the Right Income Protection Policy

Selecting the appropriate Income Protection policy requires careful consideration of several factors:​

• Coverage Amount: Determine the percentage of your income you wish to protect, typically up to 75%.​

• Deferred Period: Choose a waiting period that aligns with your financial reserves and ability to manage without income.​

• Policy Term: Decide the duration of coverage, often up to retirement age.​

• Premium Costs: Evaluate what you can afford to pay regularly, keeping in mind that factors like age, occupation, and health can influence premiums.​

It's advisable to consult with experienced insurance providers, such as Dolmen Insurance, to tailor a policy that fits your unique circumstances. Our team can guide you through the options, ensuring you make informed decisions about your financial future.​

Income Protection in the Irish Context

In Ireland, the importance of Income Protection Insurance is underscored by the limitations of state benefits. While social welfare provides some support, it may not be sufficient to maintain your current lifestyle. For instance, the new Pay-Related Benefit scheme, effective from March 31, 2025, offers a maximum weekly payment of €450 for those with a strong work history and PRSI contributions . However, this amount may not cover all financial obligations, especially for higher earners.​

Moreover, the recent announcement by Carelon Global Solutions Ireland Limited about considering ceasing operations in Limerick, putting approximately 300 jobs at risk , serves as a stark reminder of the unpredictability of employment. While Income Protection Insurance doesn't cover redundancy, it highlights the broader need for financial safeguards against unforeseen circumstances.​

Securing your financial future against unforeseen health challenges is a prudent step in today's uncertain world. Income Protection Insurance offers a reliable safety net, ensuring that even if you're unable to work due to illness or injury, you can continue to meet your financial commitments. By choosing the right policy tailored to your needs, you can focus on recovery with peace of mind. At Dolmen Insurance, we're committed to guiding you through this process, providing expert advice and support every step of the way

If you are looking for affordable, income protection cover, consider Dolmen Insurance. Did you know Dolmen Insurance Brokers offer a wide range of insurance options. Get in touch today to discuss your car insurance options and explore the benefits of bundling your insurance cover. From Mortgage Protection to Life Insurance, home insurance or car insurance we have you covered.

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*​Figures quoted are correct at the time of publishing. These figures may change. It is always advised to talk with a qualified member of our team.​