Q. I am married with 4 children and have been advised as the only bread winner in the family to take out health cover. As I understand it, SIC will give me a lump sum if I contract a serious illness while income protection gives me a monthly income until I return to work. Which is better ? Thanks Damien – Cobh Co Cork
A. Choosing either cover is a sensible decision Damien to protect your family. The SIC lump sum is meant to tide you over a couple of years until you recover from the major illness or you die, at which point your life policies pay out. However, with SIC there is no tax relief on the premiums and there are only 3 illnesses that cover 95% of all claims – heart attack, stroke and cancer. I know of one person who had a stent put into his heart after an attack and was then told 2 stents are the minimum for a claim ! I personally prefer income protection because firstly it covers incapacitation of any sort – once you cannot work for any reason and secondly attracts tax relief on the premiums at your marginal rate – the only type of insurance that does outside of life cover assigned within a pension. Essentially the policy will pay out 75% of your monthly income less any social welfare benefits until you resume work or your pension kicks in, whichever is the sooner. Irish Life and Friends First are the leaders in the income protection field. Normally cover starts after 6 months but you can elect to start the cover after 3 months and even after 1 day – it is a little more expensive. Email me for details.