Over 70% of Workers Have No Back-up Plan If They Cannot Work Due to ill Health

NEW IRELAND LAUNCHES NEW INCOME PROTECTION PRODUCT

New Ireland, today, 22nd September 2009, launched its new Income Protection Product and released some interesting insights into consumer’s views on protecting their single most important asset – their income.

With many people facing new financial challenges New Ireland is urging workers to consider what sort of financial cover they have in place should they be unable to work due to ill health. In fact, 77% of full-time workers are now more aware of the importance of Income Protection cover than ever before – yet less than three in ten workers have any form of financial protection in place.

Highlights of the study include1:

  • 72% of workers have no financial protection in place if they cannot work due to ill health
  • One-third (32%) of private sector workers, including the self-employed will not receive an income if they cannot work due to ill health, while a further 15% have no idea what income if any they will receive in this situation
  • 41% of all workers who claim they will receive a salary while they are off work sick will only be paid for a period of 6 months or less, a further 25% don’t know how long they will be paid an income when off work sick
  • 31% of workers who will receive no salary at all or a salary for a limited period of time will depend on State Benefits (maximum weekly payment currently €204) as their only source of income when they are off work sick
  • 41% of self-employed workers wrongly believe that they can depend on the State to pay them a weekly allowance if they cannot work due to illness or disability when in fact this benefit is only payable to PAYE employees
  • 90% of workers think that having Income Protection cover is a good idea
  • When it comes to actually buying Income Protection, nearly half of workers (47%) think that an average payment of €60 per month for this cover is worth the outlay, and would consider taking out the cover
  • 68% of workers were not aware that they could claim tax relief on their monthly payments for Income Protection cover

Many of us will instinctively rely on our savings and investments or our partner as a financial cushion should we become unable to work due to illness or disability. But what happens if you cannot return to work for years or not at all? Would your savings & investments last longer than a few months with the everyday outgoings you still need to pay including mortgage repayments, bills, childcare, and medical expenses etc.?

According to New Ireland, an office worker can secure Income Protection cover2 for just €42 a month or a net cost of €25 after tax relief – a small price to pay for peace of mind. By spending this small amount on protection cover workers can secure their income in the event they cannot work due to poor health.

Commenting on the findings, Brian Grimes, Head of Protection Business, New Ireland said; “Our income is arguably our most important asset and yet many of us have no back-up plan should we become unable to work at our normal job due to illness, injury, or disability. Income Protection allows people to prepare for such an event by providing a replacement income to help you continue to meet your day-to-day living expenses and any financial commitments you may have. It will continue to pay you a monthly income until you are medically sound to return to work.”

“What’s more you can claim tax relief on your payments to an Income Protection plan so the monthly outlay could be as little as €303. Falling markets and a reduction in the value of many of the traditional safety nets like savings and investments has led to people considering now more than ever how they would cope financially should they be unable to work due to illness.

“We cannot predict the future, however we can prepare for it. Income Protection from New Ireland is available nationwide and accessing it couldn’t be easier, simply contact your Broker, New Ireland Representative, call us at 01 6172000 or log on to www.newireland.ie.”

New Ireland is one of Ireland’s leading providers of financial protection products in the event of death or illness. In 2008, the company4 paid out over €71 million in death and critical illness claims to 1,080 customers.

1 New Ireland Market Research, 2009
2 Income Protection monthly premium of €42 based on a male office worker aged 35 next birthday, retiring at age 65, non-smoker, earning €50,000 per annum, after a deferred period of 26 weeks and accepted at ordinary rates. Assuming individual can claim tax relief at the higher rate of Income Tax and 4%PRSI and 4% Health Levy. Figures correct as at 01st September 2009.
3 Assuming the client is Male, age 29, Non-Smoker with a normal retirement age of 65, a chosen deferred period of 26 weeks and is accepted at ordinary rates. Our level monthly premium is based on a level annual benefit of €25,300 and is €30.
4 New Ireland & Bank of Ireland Life claim statistics 2008

ENDS

22nd September 2009

For further information contact:
Sharon McDonnell
Group Consumer Communications Manager
Bank of Ireland
Ph. 01 604 3750
Mob. 087 226 9324

Notes to Editors:

  • Income Protection cover pays up to 75% of your monthly income after a deferred period of 8, 13, 26, or 52 weeks, depending on which option you choose, until you can return to work.
  • All benefits are subject to underwriting and acceptance by the insurance company. It is important to note that terms and conditions and certain exclusions apply. Before admitting a claim certain requirements need to be fulfilled.
  • New Ireland paid out over €22.2 million in critical illness claims for 2008
  • New Ireland paid out over €49.2 million in death benefit claims for 2008

New Ireland Assurance Company plc is regulated by the Financial Regulator. Member of Bank of Ireland Group.

Benefit New Ireland Friends First* Irish Life*
8 Week Deferred Period Option
particularly attractive to the Self Employed market.		 Tick - Yes X X
Covering 75% of an annual income up to €233k**,
most attractive offer for high income earners.		 Tick - Yes X X
Tele-Interviewing saves time by reducing the need for additional medical reports, getting cover quicker. Tick - Yes X X
Confirmed Income Option
giving security of benefit at claims stage.		 Tick - Yes X X
Essential Activities Benefit
Offers continued cover if you become unemployed. This means you will receive an annual benefit of €15k in the event of extreme disability.		 Tick - Yes X X
Back to Work Benefit giving claimants
– 50% of their income benefit for the first month
– 25% of the benefit in month two after they return to work.		 Tick - Yes X X
No 1 for Price
Price leaders in more categories than any other provider.		 Tick - Yes X X
No automatic exclusions once the policy starts
There are no automatic exclusions such as HIV, improper use of alcohol, drugs or hazardous pastimes in our policy conditions.		 Tick - Yes X X

Terms and conditions apply.
Benefits are subject to underwriting and acceptance by New Ireland.
* Source: Irish Life & Friends First brochure-ware
** Deductions may apply
New Ireland Assurance Company plc is regulated by the Financial Regulator. Member of Bank of Ireland Group.

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