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Single, Joint and Dual life insurance explained

Are you confused with all the different types of life insurance that is available to you? We have explained below single, joint and dual life insurance.

Single life insurance

A single life cover is for one life only. The benefit is paid when this person dies to the persons declared beneficiary. This is normally done when a death claim is filed and the death certificate is submitted.

Joint Life insurance

A Joint life is cover on two lives. This is when the cover insures two people but the claim is paid out on the first death only, there is only one payment made under this policy. Typically the payment is made when the first of the two people covered dies however some joint life policies pay on the second death instead of the first.

Dual Life insurance

A dual life cover also insures two people but a claim can be paid on both deaths. If one person dies, the policy continues in the name of the survivor. Then when the second person dies, their life cover payment is also paid out.

Dual life insurance vs. Joint life insurance

It is important to get the right life cover for both you and your spouse so if anything happens to either of you, your family is taken care of.

If you are the sole breadwinner of the family it is important to get covered in the event of your death as the loss of the only income will devastate your family. However the loss of the partner that is not covered can also be devastating in the sense if they provide the childcare and household duties you will now need to employ someone to take over that role.

This impact is a little less if there are two incomes in the household with both partners working however the loss of an income is still very stressful for the family.

It is important to get the right coverage that suits your family situation to ensure your family’s needs are taken care of. Buying Dual or joint life insurances is more cost effective than two separate single life insurances.

As explained above the big difference between the two is that Joint, only one payout is paid but with Dual two payouts’ are paid. So it depends on your life situation which is best suited to you.

Why not have a chat with us and we can advise on the best policy for you and your family.

Life Insurance Myths That Could Hurt Young Families

You are starting a young family and you have the future to look forward to with your spouse and family. Young families have new commitments, such as buying your first home or having children. Another commitment is to make sure your family is financially secure no matter what life may bring.

If you were to die unexpectedly, life insurance is there to make sure your family can maintain their standard of living. It can also make sure they stay in your home, stay in the same school and keep on the same future track. It also gives the grieving spouse or partner time to make decisions. In some cases, it gives the spouse time to  find work outside the home, without worrying about finances.

Life Insurance Misconceptions Young Families Have

Myth 1: I only need life insurance if I’m the breadwinner in my family.

Whether you bring home more or less than your spouse, your family relies on your income. Any income would be missed if something were to happen to you. Even if you don’t work outside of the home, having life insurance is a smart choice. Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management. These services can be costly if that person has to get a job away from the house.

Myth 2: If I buy a term life insurance policy and find that I still need protection when the term ends, I can always renew the policy.

Term policies are quite popular with many young families. This is because they typically offer the greatest coverage for the lowest cost. Term insurance provides protection for a specific period of time (the “term”), and can be ideal for people who feel they have financial needs to cover that will disappear over time, such as a mortgage or a child’s education.

However, many families realize that even after the kids are grown and the mortgage is paid off, their need for insurance continues—to provide income for a surviving spouse, eliminate debts, pay taxes, etc. Because life insurance premiums increase with age, renewing your policy when the term expires can be very expensive. Moreover, poor health may make renewal impossible.

Myth 3: I only need term life insurance.

Term life insurance makes sense for many young families because their need for coverage is great and their budgets are often limited. But that doesn’t mean it’s the only type of insurance you should consider. There are other types of insurance on the market that might suit you and your family needs for the future. Contact one of our professional and highly confidential agents today and they will get you the best life insurance on the market today with the leading brokers in Ireland.

At Oomph, we can find a life insurance policy that will protect your young family. Get your free quote here.

Taxing Affairs and Wedding Bands: Tax Relief You Might not Know About

Tax Relief for Married Couples

It’s peak wedding season. This means there are new couples that have over spent on their wedding and honeymoon. They can find help from an unlikely source! The Revenue’s special gift to couples is a tax relief known as ‘Year of Marriage Relief’, according to Sarah McGurrin, Senior Financial Consultant with ‎Orca Financial in Dublin.

“In the year you’re married, both you and your spouse continue to be treated as single people for tax purposes.  However, if the tax you pay as two single people is greater than that payable if you were taxed as a married couple, then you can claim the difference as a tax refund”, the financial advisor says.

Only tax deducted in the months after the marriage qualifies for a tax refund. You are granted your refund in the years to follow.

Conversely, tax relief known as ‘Year of Separation Relief’ can also generate substantial tax refunds for people who separate!

Not everyone notifies the Revenue of changed personal circumstances, like marriage or divorce.  The financial implications of marriage in particular are important for many couples. This is because just changing the basis of their tax assessment can mean more money in their pockets.

Band Aids

Tax credits and tax bands largely determine our actual income. Up to 70% of people are on the wrong tax band, mostly married couples.  Couples sharing their tax credits can reduce their annual tax bill substantially. Especially where only one spouse is working, or only one pays tax at the higher rate and the other is a low-earner.

In the years following marriage a couple can chose from 3 tax assessment options; essentially being assessed as two single people, separate assessment, or joint assessment.

Under single assessment, each spouse is treated as a single person for tax purposes.

The main difference between separate assessment and assessment as a single person is that some tax credits can be divided equally between both partners.  So rate band and employment expenses that are unused by one partner can be claimed by the other.

However, the joint assessment option is usually most favourable for a married couple or civil partners.  Under this option, the tax credits and standard rate cut-off point can be allocated between spouses. It also is suited their own circumstances.

When both spouses are working, a married couple can earn up to €69,100 together. This amount can be earned before the higher rate of tax is charged, Sarah McGurrin explains.

“The idea is for a working married couple to reduce the amount of income which is taxed at the higher rate.  People can potentially make a saving if both spouses are working and one spouse has unused tax credits due to low income.”

Also, for those married, where one person is a stay at home parent, the earner can claim some of their credits too.

2018 standard tax rate cut-off points, the point at which an individual or couple start paying the higher tax rate, are as follows:

Single Person – €34,550

Married couple (one income) – €43,550

Married couple (two incomes) – Up to €69,100

One parent family – €38,550

Give Me Credit

Everyone has a tax credit and they are broken into different bands, mainly single, married or civil partner; PAYE; widowed or a surviving civil partner, and a single parent child carer.

Credits also include an incapacitated child credit. It can also include blind tax credit, age tax credit, the dependent relative tax credit and the home carer tax credit.

The list is long and people can find themselves in various circumstances throughout life. It is important to inform Revenue as things change.

“Ring revenue, tell them your situation, and they will point you in the right direction”, advisor Sarah McGurrin says.

A credit which is very much under-claimed is the home-carer tax credit.

Many wrongly believe the home-carer tax credit is for someone looking after other people’s children, or the elderly or disabled.  In fact, stay at home parents caring for their own children, full-time, can claim it too.

This credit (worth €1,200 in 2018) is given to any jointly assessed couple, where one person looks after a child in the home.  The parent who is caring for the child must not earn more than €7,200 a year to get the full credit and claim the relief.  A reduced tax credit can be granted if the carer’s income is between €7,200 and €9,600.

Paying too much income tax is as common as paying too little, Sarah McGurrin believes.

“It is important to understand what you’re entitled to claim.  Check online with Citizens Information or on the Revenue website, which has made the whole process of claiming tax allowances and rebates easier for both PAYE workers and the self-employed”, she says.

My Account is an accessible online facility for PAYE users on the Revenue website, www.revenue.ie, while the self-employed are covered on the ROS section of the site.

As well as explaining the various tax bands and entitlements, online claims for tax refunds can be made quickly and easily. You don’t need to be particularly tech minded, and there is phone support available too, McGurrin advises.

Sarah McGurrin

Sarah McGurrin is a qualified Tax and Financial Advisor at ‎Orca Financial and Oomph.ie , with long experience in the financial services sector and a wealth of experience in life insurance, retirement funding, tax planning and investment advice.  She creates and manages comprehensive financial plans to make the most of clients’ individual resources and personal circumstances.