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Things You Didn’t Know About Life Insurance

What do you do when you hear the words ‘Life Insurance’?

Do you zone out, hear nothing at all or just hear blah blah blah about insurance? Well, not to worry: we’ve got the low-down on what you need to know and it’s not boring or overwhelming, I swear!

Here are some things you didn’t know about life insurance:

It’s part of a sound financial plan.

You know about savings, you know about retirement. You might know a bit about investments and long-term financial planning for your health and happiness. And life insurance helps with planning for your loved ones’ long-term health and happiness, especially those who depend on your income, in case something was to happen to you.

There are different kinds.

In addition to employment-based life insurance (which typically only lasts as long as your employment at your job), there’s term and permanent life insurance.

Insurance is surprisingly affordable for most people.

Sure, there are forms of life insurance that get pricier the more features you add on to it, and the price goes up if you’re a smoker or dealing with health problems. But most people think policies costs about three times as much as it really does. For an example, a healthy non-smoking 30-year-old man can get a €250,000 30-year level term policy for about €18.23 a month. Click here for a quick quote.

Key life events are often the best time to get on board.

Getting married? Having kids? Changing jobs? Bought a house? Significant life events are often the time you become most aware of the need for life insurance—and on that note…

You can change your cover.

Perhaps you have a life insurance policy that your parents got for you when you were a baby. Perhaps you have a term policy from when you bought your house but now you have a bigger family and you’re concerned about getting them all through college. Or perhaps you want to bump up your coverage because your overall cost of living has changed. And on *that* note …

You may well need more coverage than you think.

Sometimes people think life insurance is to pay off their own debts and funeral expenses. But a key advantage of having a policy is to ensure that the people who depend on you will be OK with their on-going and future financial needs if something happens to you. Need help figuring this out how much? Go to this online.

Insurance pays out quickly.

Because life insurance doesn’t get tangled up in estate claims, it generally pays out quickly, sometimes in days or weeks.

Protects your family, but only if you let it.

Keep your premiums paid up and your beneficiaries up to date, and the door with your agent open so that your loved ones know who to call if needs be. Keep your paperwork with your other vital documents.

Can be more than just life insurance.

Using a specific kind of policy, life insurance benefits can become “living benefits,” money you can access before you die, or use to pay for long-term care, as two examples.

If you still need help getting a handle on all this, talk to us. We can help you understand the ins and outs and the best policy for your budget and needs. Because of course—the most important thing to know about life insurance is that it’s there to help the people you love the most. Contact us today. 

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.