Four things you may not know about life insurance

Life insurance, while it’s not the most exciting or palatable of purchases it is an important one nonetheless. So it is worth thinking about how to approach buying it to make sure you have the right cover for you and your family, at your stage in life. And that’s where advice from a Financial Broker, like me, can really help.

How much do you think you’d need to insure your life for? What’s your financial worth? Why is it important? If you don’t know, think of how much money your loved ones would need if you were no longer able to financially provide for them tomorrow. This is where life insurance comes in, as putting it in place will financially protect your family if you get ill or pass away. You may think “I’m young and fit, it won’t happen to me” but the facts are:

Over 18% of deaths in Ireland are people aged under the age of 65*

By 2020, 1 in 2 people in Ireland will get a cancer diagnosis in their lifetime**

1 in 5 people will get heart disease before age 75***

Here are four things you may not know about life insurance:

• It’s not as costly as you may think: Life insurance has a reputation for being expensive but it’s not as costly as you may think to insure your own life in order to provide your family with financial security should the worst happen. For example a 30 year life policy with Royal London for €200,000 might cost about €15.15 for a non-smoker who will turn 30 on their next birthday. By speaking with a Financial Broker, like me, you can ensure that you get the best value life cover to suit your individual needs at the best price.
• You can get cover, even with a medical condition: Most people can be insured and the majority will get standard premium rates from life insurance companies. This includes people with common pre-existing medical conditions, such as thyroid issues, high cholesterol or high blood pressure. According to figures from leading protection specialist Royal London, 88% of people will get their cover at normal rates.
• Policy features are important: Don’t fall into the trap of thinking that all life insurance policies are similar. Features and valuable optional benefits make the difference between cover that’s fine and the best cover available. Over time your financial needs may change, so this is when having a policy with added benefits like indexation or a conversion option will become valuable, even if you do have to pay more for them.
• Life insurance companies pay out claims: If you believe that it would be difficult to make a successful life insurance claim you wouldn’t be alone. But in fact, this is a misconception when it comes to life insurance.. For example, Royal London Group paid out 99% of all Life claims and 92% of Specified Serious Illness claims in 2016.****

If you’ve been thinking about putting life insurance in place, don’t put it off any longer and contact me on 01 6279495 or info@irelandinsurance.ie for expert advice.

5 Reasons why you should have Life Assurance Cover

• To Provide Financial Protection For Your Loved Ones
  Ask yourself if you die who would look after your loved ones financially?
  A life protection plan will provide your loved ones with an income to maintain their standard of living in the event of your premature death.
• To Payoff Outstanding Debt
  In addition to providing your family with an income, it can also be used to pay off any outstanding loans that you may owe, it can also be used to help towards the burial costs.
• To Leave Your Loved Ones an Inheritance
  You can purchase a life assurance policy and put it in trust naming the beneficiaries upon your death. This could help your children in the future with a deposit on a house and towards college education.
• Cost Effective
  Life Assurance is an affordable means of providing your family and loved ones with financial protection should you no longer be around to do so. For as little as €12.66 per month you can provide your family with a lump sum of €150,000. (This quote is based on a male or female, aged 35 next birthday, non smoker over 20 years)
• Peace Of Mind
  None of us can predict the future but we can protect ourselves for the uncertainties that life might provide us with. Life Protection can provide you with peace of mind in knowing that your family and loved ones are looked after financially should you no longer be around to do so.

Types of Life Assurance

There are many types of life assurance which help protect your income and your family from unfortunate events that hit families and individuals throughout their lifetimes. There is level term cover, convertible term life assurance and whole of life cover which lasts for ever until you die. It is very important to know which product suits your needs and it. Therefore when seeking life assurance please ensure you take professional advice and sit down with a qualified insurance professional to explain the benefits whilst the cost should be secondary but is important.

How to create wealth from Life Assurance?

Life Assurance has to be part of everyone's financial portfolio be it a family or a business as it offers invaluable wealth protection in the event of premature death. One of the best description's I have ever heard of life cover payout in the event of death is from an American insurance professional who stated that life assurance is like an "explosion of money" to a family in the event of tragic circumstances. However I also feel that that life assurance can be a creator of wealth as certain life plans can help protect wealth and help build legacies for children. For example if you had liquid assets of €200,000 in deposits at 65 years of age and wish to leave your children a legacy but spend your money in retirement, we can show you a way on how you can build a legacy build via life assurance to kick in on your death.

Is Life Cover that important?

It is one of the most important financial products that you can ever arrange during your lifetime. It protects your income, your spouse's income and your continuing family finances including paying short term debt, pay school fees and pay for college fees.

Have a look of the following example:

• If you had a 33 year old family man who is earning €100,000 per annum gross and they spend 1% of their salary per annum (approx €1,000 pa) covering €1,000,000 this would only cost 1% of gross salary yet protects net salary for over 12-15 years. Very cost effective.

Non Smokers do better?

Yes the reduction in premiums could be as much as 40% if you have given up smoking, therefore there could a substantial discount on your life assurance and mortgage protection which can be checked very easily. Also if you use an electric cigarette you can secure non smoker rates with one life assurance company.

Is there a policy that lasts forever?

Yes, most life assurance plans work off a term which is usually 20 years plus, however you can look towards a plan known as whole of life cover which will last until you die and is guaranteed to pay out in the future. Also 2 Life Companies now offer terms of 50 years for life cover so it can be very affordable for young couples to have this type of cover.

How much should you Insure your life for?

This is a very important as it relates to the amount you need per year and how much net money you require per month to ensure that your family is well looked after in the event of death of the main income earner or suffering a major serious illness. What you look at is the net income you have after tax per month and ensure this amount is protected right up to your youngest child exits college, usually about 23 years of age.

Have a look at the following example:

• Net income - €4,000 pm
• Mortgage - €1,000 pm
• Youngest child 3

• Recommended life cover solution for above - €4,000 income
• Mortgage protection would cover mortgage - €1,000 pm debt cleared
• Widows pension on death of main earner - €1200 pm
• Balance - €1,800 pm at risk income
• At risk period (from youngest child age) - 20 years

Potential life cover amount (20 x €1800 x12) - €432,000 life cover required (This ignores paying off short debt, etc)