I started a new job that has an income protection scheme. Is it worth the money?
Director of Communications and Market Insight with the CCPC Aine Carroll answers your questions.
Question: I started a new job and my employer has an income protection scheme. Some people say it's not worth the money but I don't have any other insurance that would pay out if I got sick. What questions should I ask before I decide to go ahead with the policy?
Bronagh, Galway city
Answer: Income protection insurance policies pay out a regular income if you suffer a loss of salary from being unable to work due to sickness or disability. These policies generally also set out a 'deferred period' - which is the initial period where you cannot work due to sickness or disability before the benefit becomes payable. The length of the 'deferred period' can vary between policies but is most commonly 13 or 26 weeks.
These policies generally set a maximum benefit that will be paid out. The maximum benefit payable is usually limited to a percentage of total earnings - for example 66pc or 75pc.
Check the terms and conditions of the policy you are being offered to see what it says about maximum payout. Also check with human resources what sick pay or social welfare payments you would get so that you can decide whether you really need to take out this cover.
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While we will endeavour to place your questions with the most appropriate expert to answer your query, this column is a reader service and is not intended to replace professional advice.