Have you thought about how you would cope financially if you suffered a serious illness which meant you were unable to work? If this happened, you could be faced with prolonged periods off work for treatment and recovery which could have a huge impact on your income. This could put your home and lifestyle at risk if you can’t keep up with your mortgage and other payments.

While Income Protection and Specified Illness Cover are very different types of cover, both may be able to help you and your family during a financially difficult time.

Below is a summary the differences and similarities in the two different types of cover:


Specified Illness Cover Income Protection
What does it do? Specified Illness cover pays out if you are diagnosed with, or undergo surgery for, a critical illness that meets the policy definition.  

Provides regular income if due to illness or injury you can no longer work, resulting in a loss of earnings.


How can it help you? It can help you to shoulder the burden of financial instability a sudden illness can bring. With help towards paying for home alterations, medical treatments or your mortgage. Helps you keep up with your on-going financial commitments such as your mortgage or rent, and can help maintain your family’s lifestyle.



Who does it cover?


You can choose to cover one or two people, and it will also cover your children up to age 21. It pays a proportion of your income each month for a fixed period of time.



What does it cover?


There are a list conditions which are fully covered (this may vary between different providers) there is an additional list of conditions where you will receive a ‘partial’ pay out  

It will pay out a monthly benefit (up to 75% of your pre illness salary) if an illness or injury means you are unable to do your own occupation.


Are there any risks to consider?



Policies only cover the Specified list of illnesses defined in the policy. It doesn’t pay out if you die and this type of policy has no cash in value at any time.


Income Protection cover has no cash in value at anytime, if you stop paying your premium you will no longer be covered.
What do most people claim for?


The three most common reasons for claims are; cancer, heart attack and stroke. The most common reasons for claims are mental health and musculoskeletal problems

How is the benefit paid?


You’ll receive a one-off lump sum. You’ll receive a monthly benefit after your chosen deferral period of 4,8,13,26, or 52 weeks. This will be paid until you return to work or until your cover period ends.

How long does the cover last?


After a claim is made for one of the full payment conditions, your policy will end.  

Your cover continues until the policy end date you’ve chosen, no matter how many times you claim.


Barry Kerr BBS QFA CFP® is the owner of Wealthwise Financial Planning, Block C, Hartley Business Park, Carrick on Shannon, www.wealthwise.ie. Wealthwise Financial Ltd T/A Wealthwise Financial Planning is Regulated by the central Bank of Ireland. All details and views contained within this article are for informational purposes only and does not constitute advice. Wealthwise Financial Planning makes no representations as to the accuracy, completeness or suitability of any information and will not be liable for any errors, omissions or any losses arising from its use.