Do I need Income Protection or Life Insurance?

Whether income protection is more important than life insurance depends on your personal circumstances, but here’s a useful breakdown to help you decide which should be prioritized—or if you need both:

when income protection is more important

Income protection is typically more important if:

• You rely on your income to pay bills, mortgage, childcare, etc.

• You don’t have much in savings or a financial buffer.

• You're self-employed or don’t get full sick pay from your employer.

• You’re younger and statistically more likely to be out of work due to illness or injury than to die.

• You have dependents, but your household would be financially strained even if you’re still alive but unable to work.

📌 Statistically, you're much more likely to suffer an illness that stops you from working temporarily than to die before retirement age.

when life insurance is more important

Life insurance is typically more important if:

• You have financial dependents (spouse, children) who would struggle if you passed away.

• You have a mortgage or other debts that your family would be left to cover.

• You want to cover funeral costs or leave a lump sum behind.

• You're the main breadwinner and want to provide for your family in the worst-case scenario.

Best Approach: Cover Both Risks If Possible

• Income protection to replace your salary if you’re too ill to work.

• Life insurance to provide for your family if you die prematurely.

If you must choose due to budget, here’s a rule of thumb:

• If you're single with no dependents and rely on your income → income protection first.

• If you have kids or a partner who rely on you financially → life insurance first, but strongly consider adding income protection soon after.

💡 Bonus Tip:

In Ireland, income protection premiums qualify for tax relief at your marginal rate (up to 40%), which makes it much more affordable than people think.