Protection

At Donnellan & Co. we want to help you ensure that your most valuable assets – Family, Health, Life and Income – are protected. In plain English that means should you have the misfortune of becoming ill, being unable to work due to an accident or even the untimely death of you or a loved one that your family’s financial security is assured.

As Independent Qualified Financial Advisors and Certified Financial Planners we deal with all the leading Protection Providers and can help you review existing policies or set up new policies, always ensuring that you have the right cover and are paying a competitive rate.

Contact our financial advisors and financial planners today if you would like to speak to us about Life Cover, Serious Illness Cover, Income Protection or Mortgage Protection.

Permanent Health Insurance (PHI) or Income Protection

PHI cover also known as Income Protection, covers the policy holder if they are unable to work long term due to an illness or an injury.

PHI provides a monthly income payable after a deferred period, between 8 and 52 weeks (the period during which an employer may continue to pay a sick employee). The benefit paid cannot be more than 75% of your net earnings including any state benefit paid to you while out of work. The maximum age to which you may have the cover in place is 65.

Every income earner should consider having some form of PHI cover and at the very least should be aware of what cover they have through their employer if in employment. The state benefit is minimal should you fall ill or seriously injure yourself in an accident. Those particularly at risk are the self-employed and shareholding directors as they are not covered by PRSI for illness or disability benefit. Therefore if you are self employed you will need some mechanism of providing for yourself and your family if you cannot work due to illness or injury.

Some people will provide for this by having an emergency savings fund available, however another option is to have Income Protection in place. The premiums payable for income protection are based on your age, health, occupation and the amount of cover you put in place.

Example 1

A 30 year old male engineer with a salary of €50,000 wants to cover half his salary, with a deferred period of 26 weeks. The premium for the individual is €57.

Example 2

A 40 year old Computer Programmer earning €85,000 per annum wants to protect 50% of his salary with a deferred period of 26 weeks. The premium for the individual is €108 per month. Both of the above individuals can claim tax relief on their premiums, which would reduce the cost of the premiums substantially. In the event of a claim the income received from the insurance company is taxable in the normal way.

Life Cover / Life Assurance

Life cover also known as life assurance comes in many different forms all aiming to achieve a similar goal- that is to protect your dependants in the event of your death. The required level of cover depends on each individual’s circumstances.

Term Assurance

This is a standard life cover policy covering the life of the policy holder(s) for a specified term. There are several versions of this such as:

• Level, where the premium and cover remains the same throughout the term the cover is taken out for. Example: €200,000 cover over 20 year term at premium of €100 per month. The premium of €100 will not change in this case and the cover of €200,000 will also stay the same as long as the premiums continue to be paid.
• Indexed, where the premium and cover rises by say, 5% to keep in line with inflation. Example: €200,000 cover over 20 year term at premium of €100 per month. The premium will increase by 5% per annum and so will the cover.
• Convertible, allows you to convert the policy at the end of the term at prevailing rates, without the need for further medical underwriting. This is slightly more expensive than level cover but it does build in a good option for the customer. At some point in the future without having to take medical underwriting to achieve cover the life company has to provide you with the option to convert your old policy into a new policy at that future date.

Personal/Executive Pension Term Assurance

Pension Term Assurance allows the self-employed and company directors to cover their lives in a tax efficient manner by providing life cover with the advantage of receiving full tax relief on the premiums.

Mortgage Protection

This is like the name suggests, it is usually taken out to cover a mortgage amount. It is also known as decreasing term assurance. Here the premiums tend to be cheaper than ordinary term assurance because the level of cover reduces in line with your outstanding mortgage as you pay it off.

Serious Illness

Serious Illness Cover (SIC) also known as Critical Illness Cover will pay out a tax free cash lump sum in the event of the insured person suffering from one of a list of serious illnesses covered by the policy. The definitions can vary between companies and also some companies cover more illnesses than others. The list typically includes illnesses such as heart attack, stroke, cancer etc. You can add Serious Illness Cover to your policy or have it as a separate policy. It is generally recommended to have some Serious Illness Protection since your employer may not adequately cover your income should you suffer a serious illness. If you are self-employed you will not be entitled to any social welfare benefit, given you will be a class S PRSI payer. However, it is a matter of personal choice and is not required by a bank for mortgage protection purposes. Your Financial Advisor at Donnellan & Co. can help you decide on what cover you need and the best company to provide the cover.

What are Accelerated and Standalone Serious Illness?

Accelerated Serious Illness Cover or Critical Illness Cover means that if you take out a Life Cover policy for €200,000 and add Serious Illness Cover of €100,000, in the event of you suffering one of the covered serious illnesses, the policy will payout €100,000 but will also reduce your life cover by the amount paid out, in this case to €100,000 (€200,000 less €100,000). Because of this deduction this type of SIC is generally lower cost than Standalone SIC.

Standalone SIC means that in the above example your life cover amount of €200,000 would not be reduced by the €100,000 serious illness payout should you claim on the Serious Illness Cover. In the event of your death after claiming the serious illness cover a further payout of €200,000 would be paid. This type of cover generally costs more because the amount of potential payout is actually €300,000 (€200,000 life cover plus €100,000 serious illness cover).

Keyman / Partnership Cover

Keyman Cover is life cover taken out by a company to cover the life of a key member of staff, without whom the company would struggle. It is a person upon whom the company relies heavily for the income stream and the day-to-day running of the company. The company pays for and is the benefactor of the policy.

Partnership Cover is different from Keyman Cover in that each partner in a business takes out life cover on each other’s life. The proceeds of the policy should one of the partners die is used to buy out the shareholding of the deceased’s spouse.

Advanced Financial Planning Limited t/a Donnellan & Co is regulated by the Central Bank of Ireland.