Do I need income protection?

Have you ever really thought about how important your monthly income is – it’s the thing that enables you to pay for everything: food, your home, monthly bills, and of course your family. In fact, like most people, your income is the foundation that your daily life is built on.

Worryingly, losing your income due to illness or injury could put all your financial goals at risk. The good news is that income protection cover can provide a financial lifeline when you need it most. But what is income protection and how much do you need?

What is income protection?

Income protection is a type of insurance cover that pays you an amount of money (an income) every month that you are unable to work due to illness or injury. Effectively it helps to replace the salary that you no longer get.

While you’re healthy, you pay a premium every month, or each year if you prefer. If you are unfortunate enough to fall ill or become injured and are unable to work during the term of your plan, you receive a monthly income until you are well enough to work again. However, Zurich’s income protection is more than just a monthly income; our product offers you valuable additional benefits, such as our early intervention services.

For more information on our product benefits, download our product flyer or use our income protection calculator to get a quote.

Do I need income protection? Speak to your employer

Whether or not you need income protection depends on several factors. Firstly, if you are employed, you should ask your employer how long they would pay you if you were off sick. You may be surprised at how short a timeframe this is – don't be surprised if it’s as short as two to three months.

Secondly, ask them if they have a staff income protection plan in place – if they do, that's great. But unfortunately, most Irish businesses don’t have this type of staff benefit, so it’s up to you to protect yourself.

Of course, if you are self-employed, you don’t have an employer to rely on, so the need for some form of income protection is even greater.

Illness or injury can strike at any age and for any length of time – at Zurich, over 30% of our income protection claims are paid to people under 40, and over 60% of our claims are paid to people under 50¹. Income protection is the protection policy our clients are most likely to claim on – and when they do claim, the average claim length is over 5 years, and some claims have been paid for over two decades².

How much income protection do I need?

How much income you need to protect depends on your personal financial circumstances, and your financial advisor can provide you with personalised advice and support. However, there are a number of factors you could consider when choosing how much cover you get.

1. Are you eligible for State illness benefit?

If you are an employee and eligible for the State illness benefit, which is equal to €244 per week in 2025, these maximum personal rates roughly translate into just over €1,000 a month. This amount will hardly cover your monthly bills, but it does offer some protection.

2. Do you have savings?

Savings alone usually do not provide an adequate alternative solution. Building a personal safety net takes time, and being unable to work for a prolonged period can be costly. Often, savings are earmarked for important financial goals, such as funding your pension or paying for your children’s education, relying on these funds in the event you are unable to work could jeopardise those goals.

If you have some savings set aside for a rainy day, it may allow you to choose a longer deferred period (the time between when you become unable to work and when your monthly payments start). This means your monthly premium will be lower, as you are able to assume more of the risk.

3. Do you have a partner with a regular income?

The extent to which your income contributes to your family income may affect your reliance on it and your need for coverage. However, more often than not, losing one source of income can severely impact a couple’s standard of living, and we tend to overestimate our ability to cut costs. Additionally, your partner’s income is not guaranteed; they may also lose their ability to provide an income.

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Can I increase my cover as my life circumstances change?

Yes! A lot can happen between the day you take out income protection and the day you need to make a claim. You might get married, have a child, or receive a promotion. This is why our policy includes a “Guaranteed Insurability Option”³. This means that you can increase your coverage amount when your life changes due to specified life or work events, without needing to answer any questions about your health. This option can be used each time these life or work events occur.

How much does income protection cost?

The premium you pay depends on various factors, such as your level of cover, your age, your smoking status, your health, and your occupation. If you would like to learn more about the price of income protection, visit our new income protection quote calculator.

Disclaimer - Income protection is a complex financial product. It is advisable to seek advice from a qualified financial advisor to ensure that you fully understand the terms and conditions, as well as the benefits and limitations of an income protection policy. A financial broker can help you assess your individual circumstances and determine the most appropriate coverage for your needs.

Sources:

¹Zurich Claims report

²Zurich, 2024

³Full details of this option can be found in your policy document.