A Simple Breakdown of the Various Life Covers in Ireland and How to Pick the Best One
Life Cover, also called Life Insurance is intended to assure oneself that the insurance company will pay a lump sum to protect your family financially in case of any uncertainty. All that you need to think of is, how much should be the sum assured, for how long you want your life insured, amount of premium you can manage to pay, and whether you want to pay annually or monthly.
Why do you need a Life Cover?
Let’s face it. None of us can predict the future accurately; and no matter which crystal ball you gaze into, the future still remains largely unknown. Wouldn’t it make sense to know that your family is taken care of financially, in the event of an untoward instance? We all have our loved ones and we don’t want them to suffer financially even after our death. We would like them to be financially independent to meet their immediate needs so that life is not too difficult for them, long after we’re gone.
Being an earning member and providing for the family, it’s only logical to look out for their well-being and protect them. A young mother’s death may require help to the family to take care of the kids in her absence. One may have taken a mortgage for their home; and in case of an unfortunate death of the person, a life cover is essential to ensure repayment of the loan.
Especially if you’re availing a mortgage to purchase a house, your lender needs to ensure you have a Mortgage Protection Policy as per Section 126 of the Consumer Credit Act 1995 of Ireland. Thus, all mortgage organisations require an insurance cover to avoid default of loans in the unlikely death of the person seeking a mortgage.
Funeral costs for final rites are an urgent and imminent need that a life cover will provide for. The family of the patient suffering critical ailments before death, will need to meet the hospital expenses later on, which can be covered.
The main advantage of a life cover is the peace of mind it provides to the head of the family, and assurance about the welfare of his/her loved ones on unfortunate demise.
What are the Choice of Policies available?
In Ireland, the following choices are available to a person interested in safeguarding his/her family’s interests.
- Decreasing life cover:
The amount of cover and its cost reduces every year as the policy is nearing maturity. This policy is preferred when it is availed for a mortgage on a loan.
- Term life insurance:
This is chosen when you want to insure your life for a certain period of time, which could be for 5 years or a specified period. This may work out cheaper for the individual as it is not a whole life policy.
- Life-long insurance:
This kind of policy provides insurance throughout one’s life and hence it costs more. This can be taken to pay inheritance tax too.
- Mortgage Insurance:
This is required by mortgage companies to repay the loan in the event of the death of the loanee.
- Pension life insurance:
This is taken out to provide a pension after the retirement of a person so that there is money to manage life till death.
Life Insurance Cover in Ireland in Numbers:
Insurance Ireland, in its Factfile report of 2016, states that €8,745m was paid out by life insurance companies in the country in 2016, which includes payment of: mortgages, income, and payouts for policyholders, annuity income, and lumpsum payouts.
Irish Life, in its latest annual claims report, has published that it has paid out nearly €130 million just in death claims that translates to 98% of successful claims.
Bank of Ireland paid out Life Insurance payments amounting to €105 million in 2016, with €52,400 being the largest payout.
New Ireland Assurance rolled out its 2017 Claims Statistics report, which mentions €70.5 million of life cover payments were made and the average claim amount being €51,358.
As stated by this article, Ireland’s Department of Finance has decided to look into the existing life insurance policies in order to protect the interests of the customers by reducing the premiums.
Also, this source points out that the Insurance Premiums are being lowered than ever before, when compared to someone who had taken out a cover during the pre-2008 ‘boom years’.
Thus, it’s probably the best time to go out and get a life cover to keep your family safeguarded and also avail lower premiums.
Tips When Choosing Life Cover:
When you decide to get a life cover, these are what you need to take care of:
- Try to buy a life cover as early as possible in your life. Older you are, costlier is your policy.
- Decide on how much you need? This is the most important decision. You need to think about inflation. Think of a reasonable amount your family will need after the period for which you have insured your life. In general, it is advised to get a life cover whose total amount equates to 2/3rd of your net annual income multiplied by the number of years you have till retirement.
- Find an independent insurance advisor to help you make your decision about the company you insure in, the amount you would like to insure for, the period and the costs involved, and the plan most suitable for you. Generally, insurance marketers try to convince you on plans that is most profitable for them.
- Compare between policies to decide which benefits you more based on your immediate and forecasted needs.
- Think before you leap! Discuss with your spouse or family members before you make your decision.
- As your mortgage provider requires you to have a life cover policy, they might push you to go for a certain cover that may not always be in your best interests. Always do your research first and never accept one blindly suggested by your mortgage provider.
Get the Best Insurance Advice from a reputed Insurance Broker
Going through the various life cover policies can be hard, time-consuming & also confusing on a lot of levels. When you speak to an established Insurance Broker, the advisors look to alleviate all your concerns and provide you unbiased, ethical, and legal advice on getting the best policy that is suited to your individual requirements.
Murray Financial Services has been in the business of saving people money for over 10 years by giving out practical financial advice for people looking to buy Life Cover. You can also bank on their Financial services, pertaining to Personal Pension Plans, Personal Retirement Savings Accounts, and even Mortgage Consultations.
At Murray Financial Services, we always keep your priorities above and beyond everything we do, so you get the maximum benefits with a Life Cover in the way of reduced costs and tax savings.
Call 091 740700 or visit https://mfs.ie to understand the finer points of getting a Life Insurance Cover and leverage the expertise of our financial advisors.