Life Cover, specified illness and income protection.

Acorn22

Registered User
Messages
170
Hi,

We are currently looking at expanding our insurance cover to include income protection for my partner. I am looking at cutting out the specified illness cover (currently at 75k) as the income protection should cover it. What way are people working these insurances? I feel the chances of either of us dropping dead is extremely low and the other part of me is tempting to get rid of life cover completely? What are people's experiences of claim when things go wrong?

I would appreciate people's thoughts/experiences.

Thanks K
 
Specified Serious Illness (SSI) cover pays out a lump sum which is tax-free; Income Protection pays out an income which is taxable.

SSI pays out only if you get one of the illnesses on the list. Income Protection pays out for any illness as long as it renders you unable to do your job.

SSI premiums are not allowable for tax relief; Income Protection premiums qualify for tax relief in full at your highest rate.

As Income Protection covers you for a much wider range of possible claims, if it's an either/or choice I'd go with the Income Protection.

I've had experience of Income Protection claims with both Aviva (formerly Friends First) and Irish Life. Aviva were very good at paying claims. Irish Life were very difficult. But that could just have been the specifics of the claims I was involved with.
 
I've had experience of Income Protection claims with both Aviva (formerly Friends First) and Irish Life. Aviva were very good at paying claims. Irish Life were very difficult. But that could just have been the specifics of the claims I was involved with.
One of the reasons I don't use them. I heard too many horror stories including a private detective obviously following someone as they drove to pick up their child from school. The person had to phone the police as they didn't know who this person was.

Back to the OP, don't cancel your life cover. Yes, it is unlikely that a claim will be made but think about what your family's financial position would be like if one of you did ? Life cover isn't that expensive and it is there for catastrophes.

On income protection, the maximum cover is 75% of salary less State disability. You can tailor the cover based on when the cover will start to pay out and when it will stop. Will your partner's employer pay them cover for a certain amount of time if they are out sick? If so, you don't need the cover to start until that stops. There really are a lot of variants for income protection on how you can change the price to suit your budget. You get tax relief on the premiums too but the benefit is taxed as income.

Steven
www.bluewaterfp.ie
 
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