Insurance...

Ah, the insurance industry. You’ve got to love it. No, wait, you don’t. Latest fantastic wheeze from same, an article in the SBP recently about income protection. It notes that:

It’s a common misconception that employees are paid by their employers if they are out sick. In fact, the exchequer covers the first four weeks’ pay when an employee is on sick leave under a social insurance fund. Even in the public sector, employees only get half pay after six months and then nothing after a year.

True indeed. But then come some assumptions all its own. For example:

What has so far been lost from the debate is that the annual social welfare sick pay €9,776 would put many people into severe financial difficulty if it was their sole income.

Now the flip side of this is the debate on social welfare where the amounts one typically receives are €9,776 (ex extra payments for qualified adults). Which suggests that those on that level of income might well be in severe financial difficulty. But there’s more.

Let us contemplate for a moment the definition the writer of the article has for ‘relatively affordable’?

Income protection is relatively affordable, and the premiums benefit from tax relief.
For example, the cost of €36,000 of annual salary protection for a non-smoking 35-year-old man is €38 each month, with tax relief of 41 per cent and benefit paid to age 65, assuming a deferred period of 13 weeks.

And check this out:

The debate on sick leave cover is an opportunity for employers, employees and the government to be smart in how they approach challenges in the new economy.
By taking steps now, all stakeholders can have a plan which protects them from the sudden hit that a change in personal financial circumstances, wider economic conditions or public policy can bring.

All stakeholders?

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