Income Protection policy - Payment reduced by "any other income". Do you know what this means?

Orlabloom · 03-11-2021 4:44pm #1

Hello,

I am looking into buying income protection payment policy for myself. I have found a lot of information but there is one point which remains unclear. If you could help clarify this I would appreciate it.

My understanding is that Income protection policy pays out for example 66% of pre illness earnings less "ANY OTHER INCOME" you get while out of work. I understand this includes income received from other policies, sick pay, and social welfare benefits.

I supplement my income with investment in stocks/shares/dividends and get some income from the appartment I rent. I would like to know if this income would be included as "any other income"?

Thank you for your help.

Kind regards,

Henry Ford III · 03-11-2021 4:54pm

What does your advisor say on this?

My view is that you can only insure income from a designated source(s), for example a salary or profits from a trade.

Investment income wouldn't be insurable imho, as it can carry on regardless of your health.

Atlantic Dawn · 03-11-2021 5:19pm

The reasoning for the 66% is to give you a reason to get back to full employment as soon as you are able. The investment and rental income are not guaranteed so wouldn't come in to it.

Wheety · 04-11-2021 4:11pm

I think it means income that replaces your salary so as you say sick pay from your employer and social welfare would be the main ones.

Orlabloom · 08-11-2021 2:13pm

https://www.boards.ie/discussion/comment/118113644#Comment_118113644

Thanks for your reply but I think you have misunderstood my question.

Orlabloom · 08-11-2021 8:28pm

https://www.boards.ie/discussion/comment/118113644#Comment_118113644

I don't have an advisor.

I am not looking to insure the side Income (rental and shares/dividend). I simply would like to know if having this income would reduce potential income protection payment. If so, this would mean buying income protection policy would not be worth it.

Thanks

Orlabloom · 08-11-2021 8:29pm

https://www.boards.ie/discussion/comment/118118664#Comment_118118664

I think so too, but am looking to get confirmation of this.

Orlabloom · 08-11-2021 8:30pm

https://www.boards.ie/discussion/comment/118113768#Comment_118113768

Thank you for your reply. May I ask if you are certain of your answer?

Atlantic Dawn · 08-11-2021 8:57pm

https://www.boards.ie/discussion/comment/118138090#Comment_118138090

Yes in the examples I had seen this was within the small print of the product to encourage you back to work so any income you would receive whether it be from social welfare or another sickpay scheme while unwell would be deducted so that the combined total of this plus the amount the protection company were paying would not exceed 66% of your previous full salary. There was no legal requirement for this ristriction, it was just the insurance company wanting you to be encouraged back to work.

Orlabloom · 08-11-2021 9:16pm

https://www.boards.ie/discussion/comment/118138197#Comment_118138197

Apologies, I was not clear. This part I understand also. It makes perfect sense. The part I would like to know for sure is whether the deducted income, such as social welfare and other pension/schemes, also includes investment income (such as rental and shares/dividends).

coylemj · 08-11-2021 9:46pm

https://www.boards.ie/discussion/comment/118138090#Comment_118138090

You’ve no business asking that question off an anonymous poster on boards. You haven’t even told us the name of the company who’s product you’re considering purchasing so nobody can answer with 100% certainty.

If you want a bulletproof answer, the only route is to get the insurance company (not the salesperson) to answer your question in writing.

Jim2007 · 09-11-2021 12:20pm

https://www.boards.ie/discussion/comment/118138281#Comment_118138281

Rental income is not investment income. The only people you can get a concrete answer to your question is the company offering this financial product. I suggest you ask them for clarification.

Now you have taken this as far as it will go, do I'm closing the thread, do not reopen the subject.

Income Protection policy - Payment reduced by "any other income". Do you know what this means?

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