There are many common myths about life insurance that stop people from purchasing life insurance. You may believe one of these misconceptions and have not purchased a policy yet. Life insurance could protect you and your loved ones in case of a sudden death or illness.
Just because you are young, single and healthy does not mean there is no need for life insurance. If you have any outstanding debt from education loans, car loans, or other debts, when you pass away, these debts will be transferred to your estate and still need to be paid of. Life insurance policies can help pay off these debts in case of sudden death, so your estate is not stuck paying it off. If you get a policy when you are young and healthy is usually cheaper, which makes it more manageable.
This is not always the case because company provided life insurance usually only covers 1 to 2 times the amount of your salary. 1 to 2 times your salary is not a sufficient amount. It is recommended to have 10 to 15 times the amount of your salary. Life insurance policies can provide this recommended amount in case of sudden death or illness.
This is just not true. Most life insurance providers have many different policies for people of all lifestyles. There are policies for people with different health conditions, for married and single people, and policies for people in all stages of their life.
The lose of one source of income can be a harder hit to a family than it is thought to be. Just because one spouse is not the breadwinner, you still lose one source of income for your family and this can take a bigger toll than you make think. If both income earners for the family have life insurance policies, in the case of a sudden death, the policy can assure the family can live at the same standard.
Serious health conditions may disqualify you from life insurance, but not all health condition disqualify you form life insurance. Most insurance companies have plans for people with health conditions like diabetes, high cholesterol, or high blood pressure. If you have a health condition, the premiums might be higher, but you can find a policy. Read more here.
To read more myths about life insurance click here.
At Oomph.ie, we provide competitively priced life insurance policies from the top 6 insurance providers in Ireland and can find a policy to fit your life. Take our 3 easy steps to get a free personal quote today!
Depending on the policy you purchase, you could be covered for different lengths. The term could be anywhere between one year and the rest of your life by life insurance. Depending on how long you’ve had you life insurance coverage, it might no longer be enough.
As your life changes, your insurance needs change with it. Depending on events that have happened and how your mind-set has evolved since you first bought a policy, it may be a good idea to make sure you have enough coverage. Here are some signs to watch out for.
Research has found, it will cost you €250,000 to raise a child from birth to college in Ireland. It is also estimated that the cost of education for a child is €70,000.
If you’ve recently had an addition to your family, your spouse or partner may not be able to afford those costs if something were to happen to you. That’s especially the case if you’re the financial breadwinner.
Two of the top five reasons people get life insurance are to cover mortgage debt and to pay for home expenses.
You do not want your family to be kicked out of your home if they can not pay this. When taking out a mortgage you need to consider what will happen if someone becomes ill, dies or unemployment occurs. Mortgage protection is put in place and designed to pay off your mortgage in such an event as death. There are difference kinds of mortgage protection so make sure you know the difference. It is very important that this is reviewed often especially when your circumstances change and to make sure you are on the right policy to suit your needs.
Two-thirds of people who own life insurance bought it to replace lost income if they were to pass away. If you’ve recently gotten a significant raise or your income has increased steadily since you last bought insurance, check to make sure your insurance coverage is still enough to replace it.
While income increases often come with lifestyle changes, it’s also possible to get a lifestyle upgrade. This is after you’ve paid off debt or improved your cash flow in some other way. If you notice that you’ve been spending more per month than you were a year or two ago, your current life insurance policy may leave a gap between its coverage and your loved ones’ needs.
Another top-five reason people get life insurance is to transfer wealth or leave an inheritance. As you get older, you may start thinking more about what kind of legacy you want to leave behind.
If you’ve been focused on other life insurance needs, it might be time to take another look to see if you would owe any taxes upon your death or what other expenses your estate might incur. You may also consider whether you want to leave any money behind for your children. In most cases, you won’t be able to increase the coverage on your current policy. Instead, you’ll buy a new one to supplement the first.
Whatever you do, take the time every once in a while to determine whether your life insurance coverage is still enough to take care of the people you love.
If you want to review your life insurance policy we are always here to give you free advice and provide you with our expert financial and life insurance advice for your future and your family. Contact us today for a chat.
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!
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.
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.
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.
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…
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 …
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.
Because life insurance doesn’t get tangled up in estate claims, it generally pays out quickly, sometimes in days or weeks.
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.
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.
Consumers tend to pay more attention to choosing car insurance than life insurance. If you don’t know the difference between the many different types of life insurance and assume that all policies are for life, then prepare to be seriously mistaken. There is also a good chance that you are paying too much for your policy. You could also be buying too little cover for too long a term.
Here we explain the seven most common mistakes people make when purchasing life insurance.
Many people feel if they have mortgage protection, they have family protection. This is not correct.
A bank or lender will require a life policy to be put in place to cover the mortgage on a family home. This exists to protect the lender in the event of death of one of the borrowers. Upon the death of a partner, it’s a comfort to have the family home debt-free. However, it leaves no lump sum for the family to survive financially.
A life policy is designed to replace future income on death. It allows a family to remain financially secure for many years if one or both of the incomes stops suddenly.
According to a survey conducted at Orca Financial and Oomph.ie, 46% of the life cover holders said their life assurance was a mortgage protection policy.
In a family where a main earner brings in a net annual income of €35,000 per annum, life insurance of €100,000 may sound a lot. There is no doubt that it will add financial security for a family in the short term. In the long term though, there will more than likely be severe financial strain.
If, for example, there are three children in the family, aged 11, nine and seven, a more appropriate amount of cover would be about €350,000. This would allow a surviving partner to invest the proceeds of the payout . They will also draw off the €35,000 per annum over a 13- to 14-year period, if invested properly.
Replacement income should be calculated to last until the youngest child in the family reaches independence, at about age 21. Some cover is always better than no cover, and budgeting will also be a factor. However, if possible, life cover should be calculated at a minimum of 10 times net salary.
There is a misunderstanding that a spouse or partner who chooses to remain at home and look after the children has no need for life cover. This is incorrect, as there is a sizeable financial contribution made to a family by an individual choosing to remain at home rather than work.
Without wanting to sound cold, the financial implications need to be considered. Depending on the age of dependent children, a homemaker should be insured to cover the subsequent costs that may be incurred until the youngest child reaches independence.
In most cases, life insurance is a lot cheaper than people think. The Oomph.ie survey found that the vast majority of respondents overestimated the cost of life assurance. For example, a non-smoking couple in their mid-thirties can attain €250,000 life insurance over 10 years for about €7.50 a week. A couple in their mid-forties can attain the same cover for about €15 a week.
Do not buy off anyone, or institution, that can only sell one company’s products
There are six main providers of life assurance in the Irish market. An independent broker should ensure that you get the best available price.
If you have recently bought life cover from your bank or a tied agent, it is worth getting a comparative quotation to establish if you received the best available price on the market. It’s unlikely you did.
The term of your insurance is an important factor when determining price. Personal life cover is required to make sure there is financial stability in a family until there is no longer a need, generally when the youngest child hits independence.
Life cover taken on for longer periods may only increase the cost of cover. You may be better off taking out higher cover for a shorter term. Similarly, taking out cover for too short a term may leave you in a position that the cover runs out when you need it most and it will cost a lot more to replace as you get older.
It is possible to take out cover for a higher amount over a shorter term, and include a conversion option. This allows the policyholder to convert their cover to another plan at any stage of their existing policy. They will not have to further medical information at the end of the term. The option can be added to most life policies for very little additional cost.
Life insurance companies have some of the strongest claims payouts in the trade, with an average of 99% of claims being paid from companies operating in Ireland. It’s hard to dispute death. Yet it is vitally important that all details are completed correctly on life insurance application forms, including smoking status, medical history and family history.
If someone has had a medical scare, it does not mean they won’t get cover. While they may or may not be charged a premium based on their medical or family history, it is still worth making the application to establish the position
John Molloy is managing director of Orca Financial Services. He is a founder of Oomph.ie, an online life insurance broker
There are two types of life cover, assurance and insurance. Though the terms are often interchanged, they refer to two very different products.
Assurance refers to an event that is assured to happen, where as insurance refers to something that merely might happen.
If you take out a whole of life assurance policy, and continue to pay the premium, there will be a payout of the insured amount to your estate in the future. As a result, premiums are a lot more expensive. Life insurance is much more common. An individual or couple typically insure themselves for an agreed amount over a fixed term. Should they pass away during this term, the cover is paid out, if they don’t, there is no payout.
Life insurance is taken out generally for the period in which there is a potential financial exposure for a dependent family.
Whole of life assurance would typically be arranged as part of an individual’s inheritance tax planning, and should be discussed with tax advisers and reviewed every few years.
Royal London offers whole of life cover with a “life changes” option. This offers the ability to pay for cover for 15 years and then cease payments. For an additional 10% of the premium, agreed at the outset, you get an option at the end of the cover period to get cashback of 70% of the premiums paid, or leave a percentage of the cover in place until you die.
A life insurance policy refers to a policy which pays out an agreed lump sum to a specified person in the event of your death (i.e. partner, dependents etc.) The amount in which you will be covered is agreed with the provider. In addition, the length of the policy is agreed with the insurance provider from the outset.
For example, you decide to take out life cover for €450,000 over a 20 year term. It can mean that in the unfortunate event of your untimely death, your dependents will receive the amount quoted above. The money is from your insurance provider.
This generally depends on your personal situation. If you are single and have no current dependents then you may not need a life insurance policy just yet. However, it is extremely important for protecting the financial future of your family especially if they depend on you for financial support.
If you have a young family, your life insurance policy may need to ensure many things. The policy should cover your family for income, mortgage protection or expense associated with education. It is important to make sure that you or your family are covered enough. This means they will be financially stable for a long term in the event of your premature death.
In order to get a life insurance cover, you will need to supply information regarding your medical history, lifestyle, occupation, marital status and the medical history of your family. There are certain factors such as whether you have a specified illness or if you are a smoker that may affect terms of your life cover. It is important to highlight these with your insurance provider from the outset.
At Oomph, we offer a three step life insurance application process and provide you with a personalised quote from each of the six main life assurance providers. If you are interested in getting your personal quote, apply here.