Hi, I have an income protection policy with Friends First and I have the option of increasing the benefit every 3 years, obviously increasing premiums too.
They have written to me and I am wondering about increasing the benefit but based on what they wrote I'm beginning to think maybe I'm over insured as it is!
Can anyone help me work out how to calculate it:
Is it:
a) 75% of current gross weekly income minus illness benefit
and income protection payments would be subject to all the usual income tax, prsi & USC?
or
b) 75% of current Net weekly income minus illness benefit?
If the answer is b) then I am currently over insured! Also if it's b) then do I then have to pay income tax, prsi & USC on the income protection payments that are already reduced as they are based on Net earnings?! If so then I would be pretty badly off in the event of needing to claim.
Thanks in advance for advise/answers
They have written to me and I am wondering about increasing the benefit but based on what they wrote I'm beginning to think maybe I'm over insured as it is!
Can anyone help me work out how to calculate it:
Is it:
a) 75% of current gross weekly income minus illness benefit
and income protection payments would be subject to all the usual income tax, prsi & USC?
or
b) 75% of current Net weekly income minus illness benefit?
If the answer is b) then I am currently over insured! Also if it's b) then do I then have to pay income tax, prsi & USC on the income protection payments that are already reduced as they are based on Net earnings?! If so then I would be pretty badly off in the event of needing to claim.
Thanks in advance for advise/answers