Monday 18 November 2019

Insurer cuts the cost of premiums on income protection policies

Karen Gallagher of Friends First
Karen Gallagher of Friends First
Charlie Weston

Charlie Weston

INSURANCE and investment firm Friends First has reduced the cost of its income protection cover across a range of occupations by up to 20pc.

The occupations include hotel managers, social workers, mechanics and veterinary surgeons.

Income protection insurance replace wages if the policyholder is unable to work due to an illness, injury or disability.

A spokeswoman for the firm said the latest reduction follows an overall price reduction in 2014, which would make the cost of the cover more affordable.

Income protection cover is designed to provide an alternative income if the customer suffers any illness or injury which prevents them from earning an income of their own.

The cost of life insurance-related products, such as income protection, has been falling in the last few years due to intense competition and a drop in the number of claims.

"We feel that income protection is a 'must have' product for a large proportion of the working population and should not be deemed a luxury purchase," Friends First's Karen Gallagher said.

"We know that the numbers of the working population who have this cover are low and we hope that this reduction in cost will further incentivise consumers to take action," she said.

In 2014, Friends First paid over €30m to income protection claimants, supporting them during their illness, the investment firm said.

Most people think they are entitled to sick pay in the event of being out of work through injury, illness or disability.

But the reality is that while many employers do provide sick pay on a voluntary basis, many schemes are for six months or less, Friends First said.

Ms Gallagher said many people do not consider the shortfall in income if they were to rely on social welfare unemployment benefits.

For those who are self-employed, this is not generally provided at all, she said.

Self-employed people do not get jobseekers benefit, but can get unemployment assistance which is means tested and paid by the Department of Social Protection.

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