Benefit you can insure, and the net premium after tax relief.
Max benefit you can insure
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Tax relief on premium
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Net premium
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Your breakdown
Updates live as you typeInsuring an income, not a lump sum
Income protection is the cover that replaces your earnings if illness or injury stops you working for a long stretch. Unlike life cover, which pays out once on death, this pays a regular monthly benefit while you are unable to work, usually until you recover or reach retirement age. It is arguably the most under-bought policy in Ireland, because people insure their car and their house but not the salary that pays for both. This tool sizes the most cover an insurer will let you take, then shows the genuine cost after tax relief.
The 75 percent ceiling and why it exists
Insurers cap the benefit you can insure, typically at 75 percent of your gross salary, and then subtract the State Illness Benefit and any cover you already hold. The logic is deliberate: a payout must never leave you better off not working than working, or the incentive to recover disappears. The calculator uses the State Illness Benefit personal rate of €232 a week, which is €12,064 a year, as the deduction. So your insurable figure is 75 percent of salary, less that €12,064, less existing cover.
One detail trips people up. The benefit you eventually receive is taxable as income, through PAYE, just like a salary. That is the flip side of getting tax relief on the premiums. So a policy paying 75 percent of gross does not hand you 75 percent of your old take-home, because tax applies on the way out. It is still a strong safety net, but plan around the after-tax figure.
A €50,000 earner, 40 percent taxpayer
Take someone on €50,000 with no existing cover, quoted €900 a year for a policy, paying tax at the 40 percent higher rate. The most they can insure is 75 percent of €50,000, which is €37,500, less the €12,064 State Illness Benefit, giving €25,436 of insurable annual benefit. Revenue grants income tax relief on the premium at the marginal rate, so €900 attracts €360 of relief, and the policy really costs €540.
The relief is the headline. At the higher rate, the State funds 40 percent of every premium euro, which is why income protection is one of the most tax-efficient insurances an Irish worker can hold. A standard-rate taxpayer still gets 20 percent relief, so the same €900 costs €720.
The deferred period is your main cost lever
Every policy has a deferred period, the waiting time between falling ill and the benefit starting, with common choices of 4, 8, 13, 26 or 52 weeks. The longer you wait, the cheaper the premium, because the insurer covers fewer short claims. Match the deferred period to your safety net. If your employer pays sick leave for three months, a 13 week wait costs less and loses you nothing. If you have no sick pay and thin savings, a shorter period is worth paying for. This is the single biggest dial you can turn to fit cover into a budget.
Is income protection different from mortgage protection or serious illness cover?
Yes, and they solve different problems. Mortgage protection clears your home loan if you die. Serious illness cover pays a one-off lump sum on diagnosis of a specified condition. Income protection alone replaces ongoing earnings for any illness or injury that keeps you out of work, which is why it complements rather than replaces the others.
Can I get relief if my employer pays the premium?
If your employer pays into a group income protection scheme, the premium is treated as a benefit and the relief flows through differently, with the benefit taxed when paid. The marginal-rate relief modelled here applies to a personal policy you pay yourself. Check whether you already have group cover before buying your own, to avoid the 75 percent cap clawing back the duplicate.