Tool 16 · Income protection
If your pay stopped, how long could you cope?
Your ability to earn is your biggest asset — and illness or injury can pause it overnight. This tool shows how many months you could keep the essentials running, the monthly gap you'd face, and the cover that would close it.
then face a gap of $0 a month.
Partner's pay, benefits or passive income that keeps coming if you can't work.
Pro features. Add employer sick pay, rising costs and a safety target to see your true runway month by month, the shortfall, insights and exports.
Stress-test the gap
Refine the model
Months your employer keeps paying you in full before it stops.
How many months of cover you'd like to be safe for.
Inflation on your essential spending while you're drawing down.
Month by month
Compare safety targets
| Stay safe for | Savings needed | Shortfall today |
|---|
Protecting the income everything depends on
Most people insure their car and their phone, yet leave the thing that pays for everything — their income — completely unprotected. If illness or injury stopped your pay for months, could your household keep running? Income protection is the safety net for exactly that scenario, and this tool shows how exposed you are today: how long your savings would bridge the gap, how big that monthly gap is, and what level of cover would close it.
The logic is simple. If your income stops, some costs still have to be paid — housing, food, utilities, minimum debt payments. Against that, some money may keep coming in: a partner's salary, state or workplace benefits, or passive income. The difference between your essential spending and that continuing income is your monthly gap — the hole your savings have to fill. Divide your liquid savings by that gap and you have your runway: the number of months before the money runs out.
This is closely related to your emergency fund, but it asks a sharper question. An emergency fund sizes the cushion you're building; income protection measures how exposed your income is right now, and whether an insurance benefit — a monthly payment while you can't work — is worth having. For many people with dependants or a mortgage, the honest answer is yes: savings alone rarely stretch far enough if a serious illness keeps you off work for a year or more.
A worked example
€2,200 essentials · €400 continuing income · €10,000 savings
Your monthly gap is €2,200 − €400 = €1,800. With €10,000 of savings you could cover that for about 5.5 months before running dry — and your continuing income already covers roughly 18% of essentials. To be safe for a full year, you'd need either around €21,600 of savings or an income-protection benefit of about €1,800 a month to close the gap entirely.
Things to keep in mind
- Check your sick pay first. Some employers pay full salary for a few months, then drop to a lower rate or nothing. Your real exposure starts when that runs out — the Pro sick-pay input models this.
- Income protection pays a monthly income, not a lump sum. Unlike life insurance, it replaces part of your earnings (often up to 50–65%) while you're unable to work, usually after a waiting period you choose.
- A longer waiting period is cheaper. If your savings can cover the first few months, choosing a longer "deferred period" before the benefit starts cuts the premium substantially.
- State and workplace benefits vary hugely. Don't assume they'll be enough; include only what you're confident you'd actually receive in the "continuing income" figure.
- It complements, not replaces, your emergency fund. Savings cover the short gap and the waiting period; insurance covers the long tail. Most robust plans use both.
Frequently asked questions
How is this different from an emergency fund?
The emergency fund tool helps you build a target cash cushion. This tool measures how long that cushion would actually last if your income stopped, and whether an income-protection policy is worth adding on top.
What counts as "income that continues"?
Any money that would still arrive if you couldn't work: a partner's take-home pay, reliable benefits, rental or other passive income. Be conservative — leave out anything uncertain.
How much income protection can I get?
Insurers typically cap the benefit at around 50–65% of your gross income, because they don't want the payout to exceed what you earned. This tool shows the gap you'd want to close; a real policy may cover most, not all, of it.
What's a waiting (deferred) period?
The time between becoming unable to work and the benefit starting — often 1, 3, 6 or 12 months. The longer you can self-fund from savings, the cheaper the cover.
Do I need it if I'm single with no dependants?
Possibly less urgently, but you still have rent or a mortgage and bills. If a long illness would drain your savings and leave you unable to pay them, some cover — or a bigger emergency fund — is still worth considering.