With the Irish cost of raising debt rising (after a downgrade by S&P) could we be in for a scenario in Sept when the guarantee ends that we send some of the Anglo bond holders out to sea. They can blame EU Commission (they did this when NAMA tried to use long term economic value in the business plan). This might take away the uncertainty surrounding our actual sovereign the credibility of which is being tarnished by Anglo

Income Protection is a product that is so important but is often overlooked by individuals.  Only between 12% and 15% of the working population have Income Protection Cover.  Not to be confused with redundancy cover,  Income Protection (also known as PHI) provides an Income if you cannot work due to illness or injury.

While some employers may pay sick pay for up to six months (after that you’re on your own), in a lot of cases employees who find themselves unable to work have to survive on the state benefit of €10,192.  If you are self employed that reduces to nil.  Even the civil service are not safe,  for example HSE employees only receive full sick pay for six months if they cannot work due to illness or injury.

Income Protection is relatively cheap for most types of employment. For example a 35 year old office based worker, male can protect an Income of €40k of annual income for circa €35 per month (assuming tax relief at 49%, 26 week deferred period) to age 65.  SmartQuotes.ie offer Income Protection from all four market providers. Income Protection has a number of variables which can be difficult to make sense of such as terms such as deferred period, indexation, occupation etc.  Why not go online  and get a quote in a few easy step and one of our team will call you back to go through the quote over the phone.

In addition we also offer 70% off the first twelve months premium.  For someone paying €50 a month this is a minimum saving of €420 in the first twelve months.

For all policies taken out in August and September 2010 you will be entered into a draw to win one of many short breaks in Ireland with Great National Hotels.

This is a significant sum considering the fact we are supposed to have a free education system! The reports highlights that 30% of parents are currently saving some or all of the child benefit (up 5% on 2009), with 41% of parents opting to do this with a regular savings investment plan.  The good news is the costs are very much skewed towards third level when children may be able to contribute to these costs from part-time and summer jobs.  The cost as per the report for primary and secondary education is circa €28k.

For illustrative purposes we estimated that if a parent saved 50% of the current children’s allowance (i.e. €75)  the amount would be worth circa €30k at age 18 which would cover the cost the primary and secondary education (based on 5% growth rate and savings increasing at 3% per annum).

The above highlights the importance of regular saving to provide for a child’s education costs.

SmartQuotes.ie, through our dedicated website RegularSaver.ie can provide you with low cost options to ensure that your savings are working for you and not going on excessive fees.  We offer a range of funds through Aviva and Zurich to suit all risk profiles such as equity funds, bond funds, deposit based funds, commodity funds, property funds and specialist funds.  Call us on 01 6853813 to discuss.

According to Revenue “In strictness mortgage protection policy premiums are arguably not part of the cost of management of the premises but relate more to the management of the landlord’s financial affairs than to the management of the premises. Such expenditure could also be argued to be capital in nature. However, Revenue recognize that financial institutions insist that such policies are put in place when sanctioning borrowings. Accordingly Revenue, having reviewed the position, is prepared to treat mortgage protection policy premiums paid as an allowable deduction in computing rental income for income and corporation tax purposes”

See here.

In some countries a bank offering a mortgage will insist on Income Protection cover being in place which demonstrates the importance attached to it.

While Health Insurance will cover your medical costs there are significant other costs that won’t be covered. Specified Illness Cover and Income Protection can provide financial security in the event you lose your capacity to earn.

Income Protection

Only 12% to 15% of the working population have Income Protection cover which means most individuals on sick leave for extended periods will have to rely on living on circa €200 per week.  For self employed individuals this drops to ZERO. 30% of workers believe their employer will provide sick pay indefinitely*. This is not the case. Even in the Public sector employees receive full pay for 6 months and half-pay for the next 6 months. They are on their own after this.

Income Protection cover benefits from tax relief on premiums paid at your marginal (higher) tax rate. If it is operated through net pay it can also benefit from PRSI and Health Levy relief. An Income Protection contract will provide you with an income if you are unable to work due to illness, disability, injury or sickness.  The maximum income that can be provided is 75% of your salary less State Illness benefit of €10,192 per annum for employees.

Income Protection cover of €35,000 per annum for a 31 year old male after tax relief (assumed 49%) will cost €23.78 per month (for a non smoker, guaranteed rates, deferred period of 26 weeks) to age 65.

Specified Illness Cover

Income Protection can be combined with Specified Illness Cover to provide a lump sum upon diagnosis of certain illnesses or conditions (it is important that the relevant illnesses are reviewed prior to taking out a policy). On possible use for a specified illness benefit would be to allow an individual with an illness to take time off work to obtain treatment and recover. For cover of €80,000 (twice the average industrial wage) it would cost the above individual €37 per month to age 65.

SmartQuotes.ie compares all the market providers to offer you the lowest quote available.  In addition we offer a discount on the first year’s premium. We are currently offering up to a 70% discount on the first year’s premium on certain products including Specified Illness Cover. Unlike other providers we allow individuals on monthly payment plans to benefit from a discount in their first years premium. Why not go online now and get a quick quote?

SmartQuotes.ie also offers Income Protection from Friends First, New Ireland and Irish Life. Go online or call the team on 01 6853813

In summary for circa €60 per month you can have Income Protection and Specified Illness cover to provide you with financial security if anything should happen to you.

* Based on a survey by Friends First.

As Ireland is a small open economy any pickup in the International Economic environment will have a positive impact here.  The benefit of the lower Euro should also help our export sector.  Let’s hope for more surprises on the positive side.

• Contributing to a personal pension (where net pay deduction is not operated)
• Two or more consecutive employments

These refunds can be claimed by completing this form (or in the case of pensions, this form).

For PRSI Refunds not in respect of PRSA, RAC and AVC pension contributions, contact:

PRSI Refunds Section
Department of Social and Family Affairs
Floor 3, Oisin House,
212-213 Pearse Street, Dublin 2
Telephone: (01) 673 2586

For PRSI Refunds in respect of PRSA, RAC and AVC pension contributions:
Customer Service Section
Office of the Collector-General
Sarsfield House
Francis Street
Limerick

The above is for information purposes and should not be reliable upon as tax advice. A Registered Tax Consultant can be found on taxireland.ie.

SmartQuotes.ie offer low cost Personal Pensions and PRSA’s.

While some employers may pay sick pay for up to six months (after that you’re on your own), in a lot of cases employees who find themselves unable to work have to survive on the state benefit of €10,192.  If you are self employed that reduces to nil.

It is worth considering what your current income pays for on a monthly basis:

• Mortgage
• Food Bills
• Electricity
• School Fees
• Insurance
• Pensions
• Loan repayments

This demonstrates the importance of your earnings and therefore the importance of Income Protection.

Income Protection is relatively cheap for most types of employment. For example a 35 year old office based worker, male can protect an Income of €40k for circa €35 per month (assuming tax relief at 49%, 26 week deferred period) to age 65.

That means that if you can’t work due to illness or injury your Income Protection will pay you an annual salary of €40,000 until normal retirement age of 65.

The average claim on Income Protection is 5 years and the most common types of claim relate to stress and back related injuries*

*source Friends First