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Which is the Best straight forward Income Protection scheme with no hidden catches

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  • 27-08-2014 8:00pm
    #1
    TestLink
    Registered Users Posts: 776 ✭✭✭


    Hi,
    I am an IT professional with 2 kids. I am interested in joining an income protection scheme.

    Which company offers the best straight forward Income Protection scheme with best value for money and no hidden catches?

    Would there be a health check?

    Do I need to reveal all my existing medical conditions? Would they check this with my GP?

    Appreciate any help?
    Tagged:


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    #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    ITguru wrote: »
    Hi,
    I am an IT professional with 2 kids. I am interested in joining an income protection scheme.

    Which company offers the best straight forward Income Protection scheme with best value for money and no hidden catches?

    Would there be a health check?

    Do I need to reveal all my existing medical conditions? Would they check this with my GP?

    Appreciate any help?

    Get proper advice on this. It's a complex area.

    There may be a medical examination, and you do need to reveal all existing medical conditions.


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    #3
    SBarrett
    Registered Users Posts: 160 ✭✭SBarrett


    ITguru wrote: »
    Hi,
    I am an IT professional with 2 kids. I am interested in joining an income protection scheme.

    Which company offers the best straight forward Income Protection scheme with best value for money and no hidden catches?

    Would there be a health check?

    Do I need to reveal all my existing medical conditions? Would they check this with my GP?

    Appreciate any help?

    You have to complete a proposal form and answer medical information. You have to disclose all material facts. If you do not, the contact may be null and void. On the application, you give the insurance company permission to contact your GP and the GP permission to answer the questions.

    If you have pre existing conditions, it is likely that these will be excluded from the policy e.g . if you have a bad back, they will not pay out if you go out on a claim for your back. They will still cover you however should you get in a car accident and break your back as this is not related to the pre existing condition.

    Which plan is the best? I have reviewed all the contracts in the market and I favour the New Ireland one myself. The main reason is this.

    Under income protection plans, you can obtain cover of up to 75% of your salary. If you are on €100k, you can get cover of €75k (less State disability if you are an employee). If you go out on a claim, the insurer will look at your salary in the 12 months. If your salary had dropped to €80k, they will pay you €60k income protection despite you have paid the premium for €75k.

    New Ireland allows you to provide proof of earnings at outset and they will then guarantee your payout. So, even if you do have a decrease in earnings and go out on a claim, you will receive what you paid for. If you are an employee, you need 3 months payslips. If self employed, it's 3 years earnings.

    Let me know if you need more advice on this. There are 4 providers in the market and all have their own good bits and bad bits.

    Steven


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    #4
    TestLink
    Registered Users Posts: 776 ✭✭✭TestLink


    Would the benefit I receive in case of my illness depend on the salary for my last job?

    What would happen If I cant work due to illness? Would I get state disability then?

    What is your opinion about Aviva?


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    #5
    SBarrett
    Registered Users Posts: 160 ✭✭SBarrett


    ITguru wrote: »
    Would the benefit I receive in case of my illness depend on the salary for my last job?

    What would happen If I cant work due to illness? Would I get state disability then?

    What is your opinion about Aviva?

    You can take out cover for up to 75% of your salary. If you are an employee, you take the State disability of €9,774 off that. You can of course take out a lower level of cover too.

    The amount you will receive will be based on your income in the previous 12 months prior to you going out sick. As I mentioned previously, New Ireland can guarantee the cover that you took out, even if you are on less money at the time of claim.

    Income protection will pay out if you are unable to work due to any accident, injury or illness. You are entitled to State disability if you are an employee and cannot work for those reasons. If you are self-employed, you are entitled to nothing.

    I would rank Aviva as having the second best plan.


    Steven


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    #6
    usernamegoes
    Registered Users Posts: 901 ✭✭✭usernamegoes


    My employer provides us with an Irish Life Income Protection plan for 66%; we were not asked any medical questions which makes me concerned about the level of cover.

    I was also wondering about opinions on getting in touch with them to pay the difference for 75% or getting another provider to cover the balance up to 75 or if it is worth it at all.


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    #7
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    usernamegoes wrote: »
    My employer provides us with an Irish Life Income Protection plan for 66%; we were not asked any medical questions which makes me concerned about the level of cover.

    I was also wondering about opinions on getting in touch with them to pay the difference for 75% or getting another provider to cover the balance up to 75 or if it is worth it at all.

    If it's part of a group scheme chances are there'll be a N.S.L. or non selection limit of benefit below which no underwriting is necessary, so they'll not require a proposal or medical evidence.

    I wouldn't bother insuring the 66.66% to 75% gap, although I'd imagine it's possible privately.


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    #8
    SBarrett
    Registered Users Posts: 160 ✭✭SBarrett


    Yes, as Henry said, under group arrangements, there are levels of cover given that no underwriting is required.

    You would have to take out private cover for the remainder, you won't be able to do it under the group arrangement. Whether you need it depends on your financial needs? Will the 8% difference in income make a difference? Remember, it is taxed under PAYE.



    Steven


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