Will I be able to pay my bills if I am off work due to illness?

news Sep 07, 2017

Will be able to pay my bills if I am off work due to illness?

Planning for your financial future will give you peace of mind today. This week, our Expert

Qualified Financial Adviser , Philip Sicat, Premier Financial Services, discusses Permanent Health Insurance

 

This concern for many people can be dealt with by Income Insurance.

Income insurance provides the plan holder with a regular income, which is paid out if they cannot work due to illness or injury. It is meant to replace some of their earned income if they can no longer earn an income themselves – helping to make sure that they could still enjoy a comfortable standard of living. A customer can take out income insurance if they are in full-time work or are self-employed and earn an income.

Some terms you would need to consider when applying for Income Insurance

Guaranteed Option:

Customers can choose our guaranteed option, where the rates are fully guaranteed to remain the same for the term of the plan.

 

Reviewable Option:

Customers can alternatively choose the reviewable option, where the premium rates are calculated to provide cover until the expiry age and are guaranteed for the first five years. With the reviewable option, the life company has the right to review the rates after the first five years and every five years thereafter.

 

Expiry Ages

Expiry ages can be 55, 60 or 65 depending on the occupation and customer choice.

 

Income Tax Relief on Payments

Personal Plan

Under current tax law , income tax relief is available on contributions to a maximum of 10% of the individual’s total income for the year of assessment in which the contributions are paid.

Company Plan

The contributions paid by the company / employer are normally tax deductible.

 

Does the cover increase?

Plan holders can usually choose to increase their cover by top-up or indexation options.

 

What is the Deferred Period

The deferred period is the continuous amount of time the plan holder has to be off work due to illness or injury before the incapacity benefit will be paid. The deferred period can be 13, 26 or 52 weeks depending on the customer’s occupation.

 

Escalation of claims

The plan holder can choose for the incapacity benefit to increase while they are claiming it. The plan holder must choose this option before they take out the plan.

So Income insurance is a tax efficient way to protect your income in the unfortunate event of an illness.

 

Each individual’s circumstances will determine which type of Income protection option meets their needs, but whichever route you chose, all it’s really about is putting cover in place to ensure that the necessary funds will end up in the right hands at the right time, in both a cost efficient and a tax efficient manner.

We advise that you seek professional advice as the information given is a guideline only and does not take into account your particular circumstances.

Premier Financial Services is a registered trade name of PCS Financial Services (Kerry) Ltd.

PCS Financial Services (Kerry) Ltd. T/A Premier Financial Services is regulated by the Central Bank of Ireland

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