Most people do not spend a great deal of time thinking about what would happen to their finances if they could not work. It is one of those risks that feels abstract right up until it is not, and by then, the window for planning has usually closed. Income protection sits in this strange blind spot for a lot of households. People know, in a general way, that it exists. They are less clear on what it actually does, who it is designed for, and whether it is worth paying for. That uncertainty tends to get filled in by a handful of persistent myths that circulate largely unchallenged, and which end up costing people more than they realise.

The good news is that income protection insurance is a great deal more accessible, more flexible, and more relevant than most people assume. What follows is a look at the five most common misconceptions, and what experts in the field actually say when you press them on the details.

Myth 1: It is only for people in dangerous jobs

This is probably the most widespread assumption, and it is wrong in a way that matters. Income protection is not primarily about accidents or physical injury. The majority of claims in Ireland relate to illness, including mental health conditions, cancer, and musculoskeletal problems that have nothing to do with the nature of a person’s work. A teacher, an accountant, and a software developer all face the same risk of being unable to work due to illness as someone in a more physically demanding role. The job title is largely irrelevant. What matters is whether the household depends on that income, and for most working adults, the answer is yes.

Myth 2: The State will cover you if the worst happens

Illness Benefit in Ireland currently pays a modest weekly amount, and it is subject to conditions that many people do not meet. It does not pay indefinitely, it is taxable, and for most households it represents a fraction of what they actually need to cover their mortgage, their bills, and the other costs of ordinary life. The gap between what the State provides and what most people spend each month is significant. Experts consistently point out that households that rely on this safety net, without supplementing it privately, tend to discover the shortfall at exactly the point when they are least equipped to deal with it.

Myth 3: It is too expensive to be worth it

The cost of income protection is frequently overestimated, and the calculation people use to assess it is often the wrong one. The relevant comparison is not the monthly premium against a month of normal life. It is the monthly premium against the financial exposure that comes with months or years of lost income. Premiums vary depending on age, occupation, and the level of cover chosen, but for many people the cost is lower than expected, particularly when the tax relief available on contributions is factored in. In Ireland, premiums qualify for income tax relief at the marginal rate, which considerably reduces the real cost.

Myth 4: It will not pay out when you actually need it

This one has some historical basis. There was a period when income protection policies, and protection insurance products more broadly, were written in ways that made claims difficult to substantiate and easy to dispute. The market has changed. Modern policies in Ireland are generally more transparent, the definitions used to assess claims have improved, and the claims data published by Irish insurers consistently show payout rates that should reassure anyone approaching the product with scepticism. Reading the policy carefully and understanding the deferred period and definition of incapacity before signing are still important steps. Still, blanket distrust of the product is not well-founded in the current market.

Myth 5: It is something you sort out later

Later is when a lot of people find themselves uninsured. Income protection becomes harder and more expensive to obtain as you get older, and it becomes impossible to obtain after a serious illness has already been diagnosed. The people who benefit most from the product are those who put it in place when they are healthy, employed, and do not feel particularly urgent about it. That is, admittedly, a difficult case to make emotionally. But the logic is straightforward: insurance exists for risks that have not happened yet. By the time the need feels pressing, the option may no longer be available on the same terms, or at all.

The thread running through all five of these myths is the same. Income protection tends to be undervalued because the risk it covers does not feel immediate. Most people go through their entire working life without ever needing to claim. But for those who do, the presence or absence of a policy is not a minor administrative detail. It is one of the more consequential financial decisions they will ever have made, looked at from a point in time when it is too late to make it differently.

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India’s mutual fund industry has undergone a remarkable transformation over the past few years, driven by technology adoption, greater awareness about liquidity, and a shift towards long-term financial planning. According to Kailash Kulkarni, from HSBC Mutual Fund, the behavioural change among investors has been one of the most significant developments in the country’s financial landscape.

Speaking to ET Now, Kulkarni said the COVID-19 pandemic played a critical role in reshaping investment preferences. During the crisis, many households discovered that traditional assets such as real estate were not as easy to liquidate as they had once believed.

“People realised that liquidity has a cost. You had a house, but you could not sell it. Businesses were shut, salaries stopped for some people, and money was needed urgently. They realised that real estate was not easy to unlock as they had thought earlier.”

The experience prompted many investors to rethink how they allocated their savings. Mutual funds, with their ease of redemption and accessibility, emerged as a preferred alternative.

Technology Accelerated Financial Inclusion

Kulkarni credited technology for making investing simpler and more accessible than ever before. Digital platforms have dramatically reduced onboarding times, allowing investors to complete transactions within minutes.
“All these apps that are there in the market, and the ease with which integration has happened across onboarding and transactions, mean you can literally do everything within five minutes. That has been a big behavioural change.”
He noted that while technology was a powerful enabler, the real catalyst was investors’ growing appreciation for liquidity.
“Clients told us that when they needed money, they could redeem their mutual fund units immediately. In some cases, they could not even go to a bank to redeem a fixed deposit because branches were inaccessible. Those were the baby steps that fuelled the whole technology story and the idea of looking at mutual funds more positively.”

According to Kulkarni, serious money began flowing into mutual funds after investors witnessed these advantages firsthand, a trend reflected in the sharp acceleration of SIP growth since 2020.

Investors Are Asking Questions, Not Pressing the Sell Button
Market volatility over the past year has tested investor conviction, particularly among younger participants who entered the market after 2020. Yet Kulkarni believes the industry’s response has been encouraging.

“Ten years ago, if these kinds of choppy markets had existed, I can guarantee you the sell button would have been hit very often. Now investors do not hit the sell button immediately; they consult.”

He acknowledged that younger investors tend to react more quickly to market swings.

“It is the younger investor who is more adept at using fintech apps. They can buy or sell a mutual fund with the same ease with which they order an Uber. These are the people who get shocked quickly when volatility happens.”

However, he believes access to historical market data has helped investors stay invested through difficult periods.

“Today, you can show investors what happened in 2000, in 2008, and during COVID. Every time markets corrected sharply, the units accumulated at lower levels eventually generated strong returns when the recovery came.”

Communication Gap Remains a Challenge
Despite growing awareness, mutual fund participation remains relatively low. Kulkarni pointed to findings from SEBI’s Investor Survey 2025, which showed that while 63% of households are aware of securities market products, only 9.5% actively invest.

He believes the industry bears part of the responsibility.

“We are too technical in our conversations. We talk about ratios, abbreviations, and globally used terms. The retail investor does not understand that.”

Kulkarni argued that financial communication must become simpler and more localised.

“We are still largely communicating in English and to some extent Hindi. We are not communicating enough in Marathi, Bengali, Tamil, Kannada, Assamese, or other regional languages. People want simple answers. They want to know whether they can earn better returns than a fixed deposit and what kind of safety is involved.”

Smaller Cities Driving the Next Wave of Growth
While assets under management remain concentrated in major metropolitan centres, Kulkarni said transaction data paints a very different picture.

According to him, SIP registrations from cities beyond the top 30 urban centres are growing faster than those from major metros.

“Today, the number of SIPs coming from beyond the top 30 cities is outpacing SIPs from the top 30 cities. If you look at the number of investors and transactions instead of only AUM, you will see the real change happening.”

He added that wealth levels in cities such as Mumbai, Delhi, and Bengaluru remain higher, which explains their larger contribution to industry assets. However, participation is broadening rapidly across smaller towns and cities.

Patience Is Becoming the New Investment Theme
Kulkarni stressed that investor education remains central to maintaining confidence during volatile phases.

“Data is the truth. There are periods when SIPs may not generate returns for 15 or 18 months. At times, returns may even be negative. But when the cycle turns, those units accumulated at lower NAVs can suddenly deliver returns of 14% or 18%.”

He also highlighted the importance of adapting communication for younger audiences.

“Investors under 30 do not have the patience to listen to a 30-minute explanation. You have to communicate through short videos, reels, and concise messages that they can absorb quickly.”

Balancing Excitement With Long-Term Wealth Creation
The rise of speculative trading and digital assets has sparked concerns about over-financialisation among younger investors. Kulkarni acknowledged the risks but advocated a balanced approach.

“Many young investors made money when markets and digital currencies were rising rapidly, but they have also experienced losses of 30%, 40%, or even 50% in the current market.”

His advice is simple: separate excitement from long-term wealth creation.

“I tell young people to keep an excitement kitty. Use it for thrill and excitement. Travel, enjoy life, and spend on experiences. But also keep some money safe and invest it for the long term without looking at it every day.”

A Bullish Outlook for the Industry
Looking ahead, Kulkarni remains highly optimistic about the growth potential of India’s mutual fund industry.

Household participation in financial assets has already risen significantly over the past few years, and he believes the trend has much further to run.

“We were in low single digits in 2021 and have now reached low double digits. Can we reach 30% or 40% over the next ten years? Why not?”

He cited improving investor engagement, technological advancements, stronger distributor networks, and awareness campaigns by industry bodies as key drivers of future growth.

“Awareness is growing. Technology is enabling more people to invest. Distribution partners are engaging more closely with clients. I have never seen an industry so well positioned.”

Kulkarni concluded with a strong vote of confidence in the sector’s future.

“I am a super bull. Our industry will do exceedingly well.”

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SYDNEY — The S&P/ASX 200 index climbed 170.8 points, or 1.98%, to close at 8,804.0 on Friday, marking its strongest daily gain in two months as investor optimism surged over a potential U.S.-Iran peace agreement that could ease geopolitical tensions and stabilize energy markets.

The benchmark Australian index posted its best performance since early April, with broad-based buying across sectors as global risk appetite improved. The All Ordinaries index rose 169.4 points, or 1.92%, to 9,006.1, reflecting widespread gains in mining, banking and energy stocks.

Market sentiment received a significant boost from reports of progress toward a ceasefire between the United States and Iran, including prospects for reopening the Strait of Hormuz. President Donald Trump’s comments on the potential deal helped ease fears of prolonged oil supply disruptions, sending crude prices lower and supporting risk assets worldwide.

Sector Leaders and Key Movers

Mining giants led the advance amid a rebound in commodity prices and improved global outlook. BHP and Rio Tinto posted solid gains as copper and iron ore futures strengthened on expectations of steadier demand. Energy stocks also recovered as oil prices retreated from recent highs, providing relief to companies sensitive to fuel costs.

The financial sector contributed meaningfully, with the major banks benefiting from a more positive economic backdrop. Commonwealth Bank, Australia and New Zealand Banking Group, Westpac and National Australia Bank all traded higher as bond yields stabilized and investor confidence returned.

Technology and consumer discretionary shares joined the rally, while defensive sectors like healthcare and utilities saw more modest gains. Small-cap stocks on the ASX 300 also performed strongly, indicating broad participation beyond the largest companies.

Global Context Fuels Local Gains

Wall Street’s positive close the previous session, driven by the same geopolitical developments and SpaceX’s record-breaking IPO, provided a strong lead for Asian markets. The S&P 500 and Nasdaq rose, while European bourses posted gains earlier in the global trading day.

The Australian dollar strengthened modestly against the U.S. dollar as risk sentiment improved, though it remained range-bound amid mixed signals from the Reserve Bank of Australia on future interest rate moves. Commodity-linked currencies benefited from the broader commodity price stabilization.

Analysts noted that while the one-day surge was impressive, markets remain cautious about the durability of the Iran-related optimism. Skepticism persists regarding the implementation and longevity of any agreement, with potential for renewed volatility if diplomatic efforts falter.

Economic Backdrop and Outlook

Australia’s economy has shown resilience amid global uncertainties, with strong employment data and moderating inflation providing a relatively supportive environment for equities. However, challenges remain, including a softening housing market and ongoing cost-of-living pressures for households.

The mining sector’s performance continues to anchor the ASX, given Australia’s role as a major exporter of iron ore, coal and liquefied natural gas. Any sustained recovery in Chinese demand or resolution of trade tensions could further support local shares.

Looking ahead, investors will monitor upcoming domestic economic releases, including inflation figures and retail sales data, alongside international developments. The Reserve Bank of Australia’s policy path remains a key focus, with markets pricing in limited near-term rate changes.

Broader Market Implications

Friday’s rally pushed the ASX 200 to its highest level in several weeks, helping recoup some recent losses tied to Middle East tensions. Year-to-date performance remains positive, though the index continues to navigate a volatile global environment marked by geopolitical risks, inflation dynamics and shifting monetary policies.

Corporate earnings season has provided mixed results, with resource companies generally outperforming amid commodity swings, while consumer-facing businesses face margin pressures. Dividend yields remain attractive for income-focused investors in the current climate.

Investor Sentiment and Strategy

Market participants expressed measured optimism following the session. “The relief rally on peace prospects provided a welcome lift, but sustainability depends on follow-through from diplomatic channels,” one Sydney-based fund manager noted in market commentary.

For long-term investors, the ASX continues to offer exposure to a diversified economy with strong resources and financial sectors. Diversification across sectors and careful monitoring of global cues remain essential strategies in the current environment.

Analysts recommend focusing on companies with strong balance sheets, pricing power and exposure to structural growth themes such as the energy transition and technology adoption. Valuation levels appear reasonable relative to historical averages for many quality names.

Looking Forward

As the new trading week begins, attention shifts to whether the positive momentum can be sustained. Key events include any further updates on U.S.-Iran negotiations and upcoming Australian economic indicators. Global markets, including SpaceX’s continued post-IPO performance, will also influence local sentiment.

The ASX 200’s strong close at 8,804 signals improving confidence but underscores the market’s sensitivity to international headlines. With the index showing resilience, investors will watch closely for confirmation of a sustainable uptrend amid ongoing global uncertainties.

This latest surge highlights the interconnected nature of financial markets and the potential for rapid sentiment shifts when major geopolitical risks ease. For Australian investors and companies, a more stable global backdrop could support further economic growth and market gains in the months ahead.