Can you have two income protection policies by different providers ?

[January25]

As per the question. A relation took out income protection in recent years with Aviva. It has since transpired that a much older policy existed that he forgot about. This is a an FBD farm accident protection type policy that pays an amount on death but also a weekly payment. I’m not sure if it’s income protection or just pays in the event of an accident or death only. It was taken out many years ago by parents and forgotten about but is paid up to date.

I’m unsure of what is exactly covered under either policy will need to get them to check. I think the Aviva is a more typical income protection product in the event of a defined illness.
Is it ok to hold both? Is tax relief available on both products ?

 

[LDFerguson]

There's a limit on Income Protection policies that you cannot insure for more than a specified percentage of your pre-disability income, typically 75%. So if the FBD policy pays an income due to an accident and the combination of the two policies is paying out more than 75%, then Aviva would reduce the amount they pay out, or agree with FBD that they would each reduce, so that the 75% isn't exceeded.

Other than that, there's no issue with having multiple policies.

Tax relief is only available on Revenue-approved Income Protection products, which are all the typical Aviva-type product, which would pay a claim due to any illness or injury that renders you unable to work. If the FBD policy is more of a "specified list of insured events" type product, then it probably doesn't qualify for tax relief, but it's worth checking with FBD.