Being self employed can be very rewarding, you are self directed and the success that your hard work brings belongs to you alone.

The CSO estimates that in 2022 there were 309,000 self employed persons in Ireland, that is 13% of workers, so you are not alone in recognising the benefits of self employment.

However, leaving paid employment means that you forgo employee benefits such as sick pay and illness benefit, meaning that you have to create your own safety net.

That’s where income protection insurance comes in for the self employed.

Income Protection for the Self Employed

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How does income protection work?

Basically, in exchange for a monthly premium, that is subject to tax relief, you will insure up to 75% of your regular monthly income. 

This means that, after a certain length of time known as the deferred period, you will be paid a monthly benefit to replace your earnings if you are unable to work due to illness or injury.

Income protection insurance will pay a benefit for any illness that prevents you from carrying out your job or business until you can return to work or until the end of the policy term if you are unable to return to work.

The price that you pay for income protection depends on your age, your income, your health, and your job.

How does income protection work

Do self employed qualify for income protection?

Not everyone qualifies for income protection. If you have preexisting health issues, you may pay a little more or face exclusions in cover. Or if your job is considered risky by an insurer they may decline to cover you.

It can really help to speak to an income protection insurance advisor, as they have an excellent insight into the income protection market and the different insurers’ qualifying criteria and may be able to help you to get income protection cover.

Compare income protection insurance quotes from every insurer.

Take our 90-second online assessment and get the best income protection insurance quotes on the market. Our vetted income protection insurance partners are regulated by the Central Bank of Ireland and will outline the various options available to you.

Benefits of Income Protection for the self employed

Income protection is essential if you and your family rely on your income from self employment. How would you meet your regular outgoings such as mortgage payments, bills, groceries, or costs of education or healthcare if you were unable to work?

Although you are probably looking to cut costs when setting out on your own or setting up your business, income protection is an invaluable form of financial protection and should not be overlooked.

Here are some of the benefits of income protection for self employed persons:

The financial protection offered by income protection offers you peace of mind that you will be able to pay the bills even if you were out of work as a result of illness or injury.

When you are self employed, if you are not able to work then you are usually not bringing in any income as your business relies on your contribution. This means that your income will dwindle very quickly.

Income protection is a way to protect your income meaning that you and your family’s lifestyle would not be affected by a sudden drop in your income.

Income protection may cost less than you think. You may assume that income protection will be very expensive but it is surprisingly affordable.  Income protection premiums also benefit from tax relief making them even lower than you may expect. 

Many income protection policies also have guaranteed premiums meaning that once you set up the policy, your premiums will not change for the term of that policy.

Income protection premiums depend on your age, your income, your job and your health but you can tailor your income protection policy to suit your needs and budget. 

The deferred period in an income protection policy is the length of time that must elapse before the policy begins to pay a monthly benefit. This can be as little as 4 weeks or can be up to two years. If you have savings, for example, you may choose a longer deferred period and this will lower your income protection premiums.

You can also vary the percentage of your income that you wish to cover. If you choose a lower cover amount, 50% of your income for example, this may mean that your monthly benefit is lower but you will also pay less in income protection premiums.

The term of income protection policies varies with most offering protection from ages 55 to 70. You can choose the age at which you wish your cover to cease, although choosing a longer term will probably affect the premium you pay.

It is always a good idea to talk to an income protection advisor about tailoring your income protection cover to best suit your needs and circumstances.

All of the income protection insurers offer various supports such as physiotherapy, counselling, and other targeted supports to enable you to return to work when you are out of work due to illness, injury, or disability.

Many income protection insurers will also support you to retrain and return to work in a different role or in a reduced capacity following your time off work.

If you earn less than before your time off work, your income protection policy may include a proportional benefit to ‘top up’ your reduced earnings to what they were prior to your time off.

This can give you valuable breathing space where you are returning to self employment as you may be unable to return to your previous type of business and may need to re-establish yourself in a new role.

Benefits of Income Protection for the self employed

Who offers income protection insurance in Ireland?

The following insurers offer income protection in Ireland:

Aviva - Home Insurance
irish life
Zurich - Home Insurance

There is some variation between the different insurers in terms of their eligibility criteria and in the occupations that they will cover. It is always worth getting several quotes before purchasing an income protection policy.

You can use our eligibility test to see if your job qualifies for income protection cover and to get quotes from multiple income protection insurers.

Income protection quotes

To give you an idea of how much income protection insurance costs, here are some quotes from various income protection providers to compare.

All of the quotes included are for guaranteed premium income protection. Guaranteed premium income protection means that premiums are fixed for the term of the policy, unless you choose to increase your cover periodically to allow for inflation. 

Reviewable premium income protection means that your premiums may be adjusted periodically during the term of the policy. While you may save money initially, these types of policy may mean that your premiums increase dramatically as you age meaning that your cover becomes unaffordable.

Tailored Income Protection Insurance Quotes

We are Ireland’s first impartial insurance comparison website.

  • Our mission is to help consumers find the best insurance deals in Ireland

  • All research is examined through an independent market research body

  • Our central bank regulated insurance partners will provide you with free income protection insurance quotes from every provider so you always get the best deal

Example 1

Hairdresser, age 27, a non smoker who earns €42,000 per year and insures €31,500 until age 60, with a deferred period of 13 weeks.

Aviva €74.52 per month (€44.71 after tax relief)
Royal London €74.52 per month (€44.71 after tax relief)
Zurich €87.84 per month (€52.70 after tax relief)
New Ireland €88.92 per month (€53.35 after tax relief)
Irish Life €118.70 per month (€71.22 after tax relief)

Example 2

Plumber, age 35, a non smoker who earns €64,000 per year and insures €48,000 until age 60, with a deferred period of 26 weeks.

Aviva €141.91 per month (€85.14 after tax relief)
Royal London €141.91 per month (€85.14 after tax relief)
Zurich €170.62 per month (€102.37 after tax relief)
New Ireland €186.06 per month (€111.64 after tax relief)
Irish Life €215.76 per month (€129.46 after tax relief)

Example 3

Graphic designer, age 45, a non smoker who earns €150,000 per year and insures €112,500 until age 60 with a deferred period of 26 weeks.

Royal London €195.34 per month (€117.20 after tax relief)
Aviva €203.04 per month (€121.82 after tax relief)
Irish Life €229.81 per month (€137.89 after tax relief)
Zurich €238.88 per month (€143.33 after tax relief)
New Ireland €242.49 per month (€145.49 after tax relief)

Example 4

Florist, age 55, a non smoker who earns €40,000 per year and insures €30,000 until age 65 with a deferred period of 52 weeks.

Royal London €158.01 per month (€126.41 after tax relief)
Aviva €168.61 per month (€134.88 after tax relief)
Zurich €185.89 per month (€148.71 after tax relief)
New Ireland €196.02 per month (€156.82 after tax relief)
Irish Life No quote

Example 5

Electrician, age 30, a smoker who earns €60,000 per year and insures €45,000 until age 65 with a deferred period of 13 weeks.

Royal London €193.55 per month (€116.13 after tax relief)
Aviva €195.47 per month (€117.28 after tax relief)
New Ireland €227.70 per month (€136.62 after tax relief)
Zurick €243.35 per month (€146.01 after tax relief)
Irish Life No quote

Contact Insure your Income today

Income protection is essential for those who are self employed as it provides important financial protection should you be unable to work due to illness or injury, along with a host of other benefits.

Insure your income offers 100% free quotes from 5 insurers. Avail of a complimentary phone consultation or use our online eligibility test to see if you qualify for income protection insurance today.

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