Claire, who lives in Co Dublin, should be aware that most income protection policies cover illnesses and injuries, including stress and anxiety, that prevent you from working for an extended period of time, as long as you have medical support for your claim. However, it’s important to note that these policies generally have a waiting period, also known as a “deferred period,” before you can make a claim. The length of this deferred period can vary, ranging from one month to one year, with three months being the standard time frame. Choosing a longer deferred period can result in cheaper coverage and may align with your employer’s sick pay policy. To determine if this is the case, it’s advisable to consult with someone in your HR department.
Alan, who lives in Co Kilkenny, is wondering if he still needs life insurance since he has death-in-service (DIS) cover through his workplace. DIS cover, provided by employers through a trustee scheme, is an attractive benefit that allows for up to four times your salary to be paid out as a tax-free lump sum to your estate after your death. This benefit remains in place as long as you remain employed, and it is paid out regardless of whether your cause of death is related to your job. Some plans even include a continuing pension for your dependents. However, it’s important to note that there are differences between DIS cover and personal life insurance. DIS cover is typically only paid out if you die while still working for your employer, and most plans have an age limit. On the other hand, with personal life insurance, you have more flexibility to choose the duration of the plan, the coverage amount, and it is not tied to your employment. To assess your individual life cover needs and budget, it is recommended to consult with a financial broker.
Cillian, who lives in Cork City, is in his 20s and considering opening a Personal Retirement Savings Account (PRSA). He is considering a non-standard PRSA because he believes it will provide more investment choices. While this is true, there are other differences between standard and non-standard PRSAs. A standard PRSA offers pooled investments that span a range of assets within a fund structure provided by a company. In contrast, a non-standard PRSA offers a wider range of investment choices, including pooled funds, company shares, and bonds. Another difference to consider is the fees and charges. A standard PRSA has a cap of 1% per year on the value of the fund (known as an annual management charge) and a cap of 5% on contributions. On the other hand, a non-standard PRSA, offered by a broader range of providers such as stockbrokers, does not have a cap on charges. To find the best option suited to your needs, it is recommended to consult with a broker.
Noelle, living in Dublin 8, has been suffering from long Covid for over a year, which has caused her to be in and out of work and put a strain on her family’s finances. She wonders if it is too late to get income protection insurance. Unfortunately, given that long Covid is a long-term health condition, it is highly unlikely that any insurer would offer her income protection as it would be considered a pre-existing condition. It is important to note that the best time to get income protection insurance is when you are healthy since illness or injury can occur at any time. If you have any further questions, feel free to email them to [email protected].
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