Income protection insurance in 2024. Best income protection insurance in Cyprus.

Income protection insurance in Cyprus

Income protection insurance is an indispensable insurance product for self-employed people and businessmen.

An income protection insurance contract can provide a stable source of income for the insured person if they are temporarily unable to work or become permanently incapacitated to do so.

In this guide to income protection insurance in Cyprus, we will help you understand the various types of income protection insurance available to you and explain their coverages in detail.

We will also guide you to find the best income protection insurance in Cyprus.

Table of contents

What is income protection insurance?
Income protection insurance coverages
Temporary disability insurance in Cyprus
Total permanent disability insurance in Cyprus
Permanent partial disability insurance in Cyprus
Income protection insurance in Cyprus: additional coverages
Income protection insurance cost in Cyprus
Affordable income protection insurance in Cyprus
Best income protection insurance in Cyprus
Online income protection insurance
Income protection quotes

What is income protection insurance?

Standard income protection insurance includes various insurance coverages.

In Cyprus, income protection insurance policies typically include the following coverages.

Temporary Disability Insurance
Total Permanent Disability Insurance
Permanent Partial Disability Insurance

Income protection insurance is designed to provide coverage for businessmen, self-employed people and employees in case they cannot work due to an unexpected event that may arise.

Income protection insurance in Cyprus provides coverage for the following types of circumstances.

If you become temporarily unable to work.
If you become permanently unable to work.
If you are not able to perform your job as usual until the end of your life (i.e. you are permanently but partially able to fulfil your job).

What does income protection insurance exclude?

Income Protection Insurance is nearly identical to Personal Accident Insurance.

The main difference between both insurances is that income protection does not cover accidental death like personal accident insurance.

To learn more about accidental death coverage, follow this link to read our article about personal accident insurance.

Income protection insurance coverages in Cyprus

Income protection insurance includes the various insurance coverages mentioned above.

We will examine each coverage type in detail below.

Temporary disability insurance in Cyprus

What is a temporary disability?

A temporary disability is defined as a temporary inability to work for a predicted amount of weeks or months due to an injury.

The injury is only temporary, so the worker will be able to return to work once the injury has healed or they have fully recovered.

What is temporary disability insurance?

This type of insurance is a policy that provides compensation for each day you are unable to work because of an accident.

The amount of compensation you receive is defined by your salary, as is officially documented by the social security authorities of Cyprus.

For example, suppose you choose coverage of 70% and your salary is €2,000. Income protection will compensate you €1,400 monthly for each month you cannot work.

How does temporary disability insurance work in Cyprus?

Temporary disability insurance refers to self-employed people, businessmen, and employees who are eligible to receive a stable source of income if they are temporarily unable to work after experiencing an accident.

It’s important to note that employees’ salaries in Cyprus are covered by the social security authorities only at 50% for sick leave.

To start the process of acquiring this insurance, you must first pick a temporary disability program.

There are income protection programs which cover temporary disability exclusively for accidents, but there are also comprehensive programs that also cover illnesses.

As mentioned, you can then pick a percentage of coverage based on your registered salary. The amount of coverage cannot exceed 100% of your salary.

In most cases, temporary disability insurance coverage cannot exceed 24 months. After this time, the disability is classified as a permanent disability.

As such, it’s highly recommended to acquire an income protection package that includes both coverages: temporary and permanent disability insurance.

It’s also important to take into consideration that most insurance packages have waiting periods.

Most insurance companies include waiting periods of 7 or 14 days. In practical terms, this means that the policy will only pay out in 7 or 14 days after the date of the accident.

Total permanent disability insurance in Cyprus (TPD Insurance)

What is a total permanent disability?

A total permanent disability (or TPD) is defined as a permanent inability to work.

Permanent disability is a mental or physical impairment that permanently changes a person’s ability to perform the work duties that they previously did before the accident took place.

For insurance purposes, total permanent disability includes by default:

Permanent vision loss in both eyes.
The loss of both legs or both arms or one leg above the ankle and one arm above the wrist.

How does total permanent disability insurance work in Cyprus?

First, you must pick a total permanent disability insurance program.

There are programs which cover total permanent disability exclusively for accidents, while there are also comprehensive programs that also cover illnesses.

Unlike temporary disability insurance, you don’t choose a monthly compensation amount.

Instead, you choose a lump-sum amount that will pay out in the event you become permanently disabled.

Specifically, a licensed medical committee must officially confirm that the insured person is permanently disabled.

Within 15 - 30 days of the medical committee’s confirmation, the insurance company will pay out the chosen lump-sum amount.

For example, if you chose an amount of €200,000, in the case you are diagnosed with a total permanent disability, you will receive €200,000.

Note: you cannot choose a disproportionate amount compared to your income, i.e. you cannot request a €1 million coverage if your annual income is less than €45,000.

Moreover, the maximum coverage amount you are able to choose decreases as you get older.

For example, you cannot request €500,000 coverage if you are over 60, regardless of how much you earn.

Permanent partial disability insurance in Cyprus (PPD Insurance)

What is a permanent partial disability?

Permanent partial disability (or PPD) is defined as a permanent disability that is only partial.

Someone is classified as having a permanent partial disability if they are injured in an accident at work and can recover and return to work, yet they still have a permanent impairment.

In a practical sense, a permanent impairment, even if partial, makes it impossible to work at full capacity as before the accident.

For example, suppose a surgeon loses vision in both eyes. This impairment is classified as a total permanent disability (TPD). However, if they lose vision in one eye, this is classified as a permanent partial disability (PPD). Therefore, the surgeon can continue working but not at total capacity.

How does permanent partial disability insurance work in Cyprus?

Permanent partial disability insurance always comes with total permanent disability insurance.

If you choose a total permanent disability insurance lump-sum compensation amount of €300,000, as mentioned, you will receive €300,000 for total permanent disability.

For example, you will receive the full amount if you lose one arm because that is classified as a total permanent disability.

Nevertheless, you will not receive the entire lump sum amount in the event of a permanent partial disability.

In this case, insurance companies have tables that specify the percentage of compensation for each permanent partial disability type.

For example, you will be paid 50% of the lump sum amount by the insurance company if you lose vision in one eye, i.e. €150,000 (i.e. 50% of €300,000).

Another example, you will be paid 5% of the lump sum amount by the insurance company if you lose one finger (i.e. 5% of €300,000 = €15,000).

The compensation amount also depends on your profession.

For example, if a professional musician loses one of his fingers, they are considered to have a total permanent disability and, as such, will be compensated for the whole lump sum of €300,000.

Income protection insurance in Cyprus: additional coverages

The following additional coverages are usually attached to an income protection insurance policy.

Surgical Cash Benefit
Hospital Cash Benefit

Surgical cash benefit in Cyprus

If an illness or injury leaves you hospitalised as an in-patient and you must have surgery, an insurance company will pay your selected lump-sum amount in accordance with the type of surgery performed.

For example, if the lump sum is €4,000, you will be paid €4,000 every time you have an operation, regardless of whether you have health insurance or not.

Hospital cash benefit in Cyprus

Suppose an injury or illness leaves you hospitalised as an in-patient, regardless of whether you had an operation or not. In that case, our company undertakes to pay a monthly benefit for a 24-month period maximum for each month you are hospitalised.

For example, if the lump-sum amount is €1,000, in addition to the temporary disability insurance benefit, we will pay an additional €1,000 for each month you are hospitalised.

This benefit might include waiting periods.

Income protection insurance cost in Cyprus

The cost of income protection insurance is defined by the following factors.

Age. The older you are, the higher the cost of the insurance.
Gender. Women pay lower premiums as they have a lower mortality rate than men.
Weight. According to the BMI index, being obese/overweight creates higher premiums.
Smoking and alcohol. Premiums increase if you regularly smoke and drink alcohol.
Medical history. Pre-existing and past conditions might lead to a higher premium.
Limit of coverage (either the lump-sum amount or the monthly amount of compensation).
Family or individual plan. Family plans are cheaper per person than individual plans.
The reputation and creditworthiness of the insurance provider. International insurance company plans in Cyprus are more expensive than local providers’ plans.

Affordable income protection insurance in Cyprus

There is little difference between the price of income protection insurance plans between local insurance providers, as the competition in Cyprus between insurance companies is fierce.

For cheap income protection insurance, you will find that local insurance companies are cheaper by default. Specifically, local plans might be 15% cheaper than those of international ones.

It’s worth remembering that if the premiums differ significantly, the terms will differ significantly. As always, read a contract in full before choosing an insurance policy.

Best income protection insurance in Cyprus

As noted throughout our guide, the best income protection insurance is subjective. Your income protection policy will be designed around your personal needs.

With our experience in the insurance sector, we have created affordable insurance products to suit every individual’s needs, goals, and financial constraints.

Pitsas Insurances offer you the following benefits:

No medical questions.
Quick settlement of claims.
Cover from just €25 per month.
Plans are fully tax exempted. Businessmen can use the expenses as their company’s operating expenses.

With 35 years of insurance expertise, and UK & US underwriters, we offer you lower premiums than those you would get directly from insurance providers.

Communicate with one of our insurance specialists today to find the best income protection insurance.

Online income protection insurance

Pitsas Insurances is the largest expatriate insurance company in Cyprus and one of the largest income protection insurance providers.

Follow this link to learn more about our income protection insurance plans.

Income protection quotes

Follow this link to receive free income protection quotations from local and international providers.

Pitsas Insurances Team