Other Payment Protection Insurance

W

WGT

Registered User
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Hi,

I took out a policy about 4 years ago, following advice from a financial advisor.

The premium is €40 per month. At the moment I'm reviewing my monthly expenditure. This policy promises to pay a percentage of my salary should I become unable to work.

Is this something that would already be covered by my employers or by my PRSI/PAYE contributions? In other words can I cut back on this €40.

If it's justified I have no problem continuing it and can afford to do so (ish).
 
Hi WGT,

I notice that you asked was it covered by your employers PRSI. I presume you mean in relation to your PRSI contributions on behalf of yourself? Therefore I assume you are self employed?

The reason I ask is that:

1) The policy you have is also known as ASU (Accident, Sickness & Unemployment benefit.
2) If you are self employed and as a result of accident or injury you cannot work, you are not entitled to any disability payment from the state.
3) If you are self employed and you lose your job, you are not entitled to any unemployment assistance or benefit.

Therefore for you, this cover is very important. At best you might qualify for mortgage Intreset Payment assistance.

In your position you should probably look at Income Protection also! You get tax releif on the premiums and the payment should you ever claim on it can potentially pay you the benefit up to retirement. Whereas the policy you have will pay for 1 year maximum.

Both are worthwhile if you can afford them! You need to ask yourself, if things went well, could you afford not to have them?

Patrick
 
Thanks PJ111,
Actually I was self employed when my financial advisor recommended this protection. I am now a PAYE worker.
I thought this was income protection i.e. it protects my income if I become sick. What is the difference?
The fact that I am now a PAYE worker, is the ASU overkill?
 
No problem WGT. It's not not necessarily overkill. If you are PAYE you are now entitled to state disability benefit and unemployment benefit, depending on how many stamps you have. So you now have that added support (if you can call it that) that you didn't have before.

ASU is not very heavily underwritten if at all, and the benifit is based on the amount you need to continue to remake repayments of a specific loan or mortgage. Claims will usually be paid for max of a year.

Whereas the Income Protection policy is designed to replace (usually) about 75% of your income for costs of living loans mortgages etc. It's also quite heavily underwritten. Claims can be paid up until retirement so long as you're ill. Also as I stated in the last post you get tax relief on premiums which makes it more affordable.

Patrick
 
Question is, Is the dole going to help you repay this mortgage any easier? I suspect it wouldn't!
 
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