Guest Blog Post by Darach Honan, QFA, Director of Honan Financial Services
Hey there, homeowners-to-be! Picture this: you’ve found your dream home, signed the dotted line, and are now living the good life in your cozy abode. But wait, have you ever thought about what would happen if life threw you a curveball. Like an unexpected illness or injury that prevented you from bringing home the bacon? Cue the importance of income protection!
Why you need income protection
Let’s face it, mortgages are no joke. They’re like a long-term relationship with your bank. Just like any relationship, you want to keep it strong and healthy. That’s where income protection swoops in like a superhero, cape and all, to save the day.
It’s like having a backup plan for your backup plan. It ensures that if the unexpected strikes and you find yourself unable to work, your mortgage payments don’t become a source of stress-induced nightmares.
Income protection isn’t just for the super cautious or the perpetually worried. It’s for anyone with a mortgage and a desire to protect their slice of the homeownership pie. Whether you’re a first-time buyer or a seasoned homeowner, income protection is your trusty sidekick.
Income protection explained
So, what exactly is income protection? Think of it as your financial safety net, your guardian angel in times of need. This is a type of insurance policy which insures your income against illness or injury and a subsequent inability to work.
Your income is your most valuable asset. Consider a 25-year-old who earns €50,000 per annum. This person is likely to earn €2,000,000 over the course of their career and that is not even accounting for inflation. If you had any other asset worth €2,000,000, it is very likely that you would insure it. Your income should be no different!
Tax relief on premiums
Here’s the kicker: income protection is seen as so important by our government; they offer tax relief on your premiums. This means that if you pay tax at the 40% rate, you will receive 40% of your premium back in tax relief. This makes it very affordable.
I have savings: Do I still need it?
Now, I know what you might be thinking, “But hey, I’ve got savings, I’ll be fine!”. Sure, rainy-day funds are great, but let’s be real here—how long will your savings last if you’re unable to work for an extended period? Income protection steps in to provide ongoing financial support, giving you peace of mind knowing that your home, your sanctuary, remains just that.
So, before you kick back and relax in your new digs, take a moment to consider the importance of income protection. It’s not just another expense; it’s an investment in your future, your home, and your peace of mind. After all, isn’t that what homeownership is all about?
Stay savvy, stay protected, and here’s to many happy years in your home sweet home!
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This blog post was contributed by Darach Honan, QFA
For contact: 0871277155 or [email protected]
Honan Financial Services provide impartial financial advice and exceptional service on all aspects of Financial Planning which include Life Protection, Retirement Strategies, Savings and Investments.
