Suitable for income protection

Single male age 22

Single female age 21

Single parent age 30-1 child

Married couple both 32 no children

Married couple in their 30's with 2 children aged 5 & 8

Married couple in their 40's with 2 children at school/university

Married couple in their 50's

The aim of this class of insurance is to provide a fixed amount or a proportion of salary to someone who is prevented from carrying out their work because of disability, sickness or accident which is of a long term nature. A person would require to be absent for a set period (usually between three to 12 months) before the payment commences.

Individuals can effect this class of business but mostly it is arranged by an employer for his employees.

Many employers arrange to continue paying salaries during months of illness for a certain period. At the end of this period some employers may wish to discharge their obligations to make further payments although still providing for the unfortunate employee. By effecting a policy, often running in conjunction with the retirement benefit scheme, plus the State single person's sickness benefit does not exceed 75 per cent of earnings.

Once started the benefit could continue until the member reached retirement age. For an extra premium additional payments can be made by the insurance company to the employer to cover the contributions that he and his and his employee would have paid to the retirement benefit scheme.

The premiums for this type of insurance are relatively small and is not normal for the employee to contribute towards the benefit.

Although it is often linked to a retirement benefit scheme it is a contract between the employer (as a distinct from the trustees) and the insurance company.

There are some restrictions and no benefit would normally be paid as a result of:

  1. War.

  2. Intentional self-injury.

  3. Pregnancy or childbirth.

  4. Engaging in aviation or aerial flight other than as a fare-paying passenger in an aircraft piloted by a pilot holding a commercial licence. Before payments commerce, the insurance company will usually require a medical report and/or examinations will be required.