Income Protection in Ireland: Why It Matters and How to Get Covered
If your income stopped tomorrow, what would happen?
No rent. No car. No savings. No nights out. No way to support your family.
Your income is what pays for everything else. Yet most people in Ireland insure their phone before they insure their salary.
Income protection insurance is one of the most overlooked types of cover in Ireland. It’s also one of the most valuable. If illness or injury stops you from working, income protection can keep your finances on track by replacing a portion of your salary.
This blog walks you through what income protection is, how it works, and why it matters.
You can also download our free guide, The Importance of Income Protection, for a more detailed breakdown.
What is Income Protection Insurance?
Income protection is an insurance policy that pays you a regular income if you can’t work due to illness or injury. You can protect up to 75% of your salary, and payments can continue until you return to work or reach retirement.
Key facts about income protection in Ireland:
You choose a waiting period (called a deferred period) before payments begin: typically 13, 26 or 52 weeks
Available to employees and self-employed people working at least 16 hours a week
Payments are taxable, just like regular income
You get full tax relief on premiums at your marginal tax rate
This isn’t the same as serious illness cover. It’s designed for long-term income stability. It helps you keep paying the bills, even if you can’t earn a wage.
Why You Need Income Protection in Ireland
Could you live on €244 a week?
That’s the current maximum State Illness Benefit.
Most people couldn’t cover their mortgage, rent or day-to-day expenses on that. And if you’re self-employed, you won’t receive it at all. Income protection gives you a safety net when the unexpected happens.
Key income protection statistics:
1 in 3 Irish workers will be out of work for 6 months or more during their career
The average time off due to serious illness is five years
If you had a machine that printed money every month, you’d insure it.
You are that machine.
How Much Income Can You Protect?
Let’s say you earn €50,000 per year:
75% of that is €37,500
Less the State Illness Benefit of €12,688
You can protect around €24,800 a year (€2,066 a month)
You don’t have to protect the full amount. Many people just cover the essentials – like the mortgage, rent or childcare costs.
What Does Income Protection Cost?
Premiums depend on your:
Age
Health and smoking status
Job (some jobs carry more risk)
Level of cover
Deferred period
Whether you want your cover to increase over time
But thanks to tax relief, the cost is often lower than people expect. A 40% taxpayer might only pay €60 for a policy with a €100 monthly premium.
How to Choose the Right Deferred Period
Your deferred period is how long you wait before the policy starts paying. If your employer covers 13 weeks of sick pay, it often makes sense to pick a 13-week deferred period. No sick pay? You may want a shorter one. The shorter the waiting period, the higher the premium.
Why Income Protection is Vital for the Self-Employed
If you work for yourself, you don’t get sick pay. You’re not eligible for State Illness Benefit either. That means no income at all if you can’t work.
Income protection for the self-employed in Ireland is one of the only ways to create a safety net. And because it’s tax-deductible, it’s more affordable than you might think.
When Should You Take Out Income Protection?
If you’re young and healthy, this is the best time to lock in cover. Premiums are lower, and you’re more likely to be accepted without exclusions.
You’ve got two choices:
Ignore it and hope for the best
Take five minutes to understand your options
Download Our Free Income Protection Guide
At Financial Planning Matters, we help people across Ireland build smart, protective plans for life’s "what-ifs." Our free eBook, Income Protection 101, breaks it all down in plain English. If you rely on your income, it’s worth a read.
Download The Importance of Income Protection (PDF)
If you’d like help deciding how much cover you need and how it fits with your long‑term goals, we’re here to help.
Book a consultation or email us at advice@fpms.ie.
Together, we’ll create a plan that protects your finances from life’s uncertainties.
