Do you need life insurance for the protection of your family? Have you ever thought what would happen to your family upon your passing?
After all, your family is financially dependent on you for their every need, whether its school fees, house rent, car loans or routine bills.
Would your family be able to survive if you weren’t around anymore?
That’s why it is important to have life insurance cover in the first place. It’s important because you never know what unpleasant events can take place in the future.
Life insurance is designed to help your family pay the bills and achieve financial security.
It provides you with peace of mind because it ensures financial protection for your family and loved ones should you die prematurely.
Do You Really Need Life Insurance?
Not everyone needs life insurance. It is determined by your personal circumstances. You might need cover if your family or others rely on you for financial support or if you don’t have other benefits through your pension plan or job. Young families require more life cover than those with older children as the benefits tend to last longer.
However, you might not require any cover at all if you have no family or anyone financially dependent on you. Likewise, if your pension plan already offers life insurance cover, there is generally no need for additional cover.
In a nutshell, life insurance is essential if you have a family or someone you support financially.
How Does it Work?
Generally speaking, the insured amount will only be paid out in the event of your death.
Let’s say you have purchased a policy for €200,000 over 20 years. If you die at any point during the 20-year term of the policy, a lump sum of €200,000 will be paid to your family or nominees.
However, if you are still alive after the term of your policy, you will get nothing. And there will be no refund given on the premiums that you have paid. While the policy won’t cover your illness, you can get specified illness cover added to your normal life insurance policy (the next point goes into this).
What Additional Benefits or Types of Covers Can Be Added to Life Insurance?
You can add other benefits or extra cover to your life insurance policy.
For example, you can add specified illness cover to your life insurance. It provides you with a lump sum to cover any illnesses listed in the plan.
Also, indexation or inflation protection plans can be added to your life insurance policy. For example, the level of your premiums could increase each year in line with inflation. So, if you passed away during the first year of your policy, €300,000 might be paid out. However, if you died in year 10, the insurance company would pay out a higher amount as the level of cover increased in line with inflation. This is also known as increasing term insurance.
Conversion benefit is another possibility that can be added to the cover. It lets you increase the term of your insurance cover at any point during the policy without having to undergo a medical test or answer medical questions.
What are the Key Benefits?
To Replace Income:
The loss of income can be a massive burden for any family. The amount of cover you insure for can help overcome this loss of income. Although this is not an emergency fund, it can help your family maintain their standard of living without facing serious financial hardships.
To Pay End of Life Costs:
It can even cover your funeral expenses including burial costs and taxes. The average funeral cost in Ireland is almost €4,000, including the cost of a coffin, transportation, death notices and flowers. The average cost of a burial plot is also expensive, so life insurance can ensure that your family won’t have to pay very significant costs for your funeral.
To Pay off Debt:
The insured amount provided to your family can be used to pay off your mortgage, as well as debts like credit cards and loans.
To Ensure Peace of Mind:
Knowing that your family will have financial security simply because you have a life insurance policy provides you with great peace of mind.
What Types of Life Insurance Cover Are There?
Term Life Insurance:
Your family is provided with a fixed lump sum should you die within the specific term or the policy (for example 20 years). However, it does not protect for your whole life, making it more affordable than other plans.
Whole of Life Insurance:
This plan covers you for your entire life, making it the most expensive plan.
Find Ireland’s Best Deals on Whole of Life Insurance
Mortgage Life Insurance:
As the name suggests, this pays off your mortgage after your death. But it will not provide any extra benefits unless you have opted for them.
Pension Life Insurance:
This can be included in your retirement plan. It offers coverage for a certain amount of time, which is decided by you. Your family will be provided with a lump sum should you die during the term of the plan. The benefit of this type of insurance is that it is affordable and helps you get tax relief on your payments.
Find Ireland’s Best Pensions Advice
Decreasing Life Cover:
This provides a lump sum amount in the event of your death. With this this type of policy, the cover amount is likely to reduce each year. That’s why it is cheaper than Term or Whole of Life cover. This type of cover is designed provide your family with an income. The cover amount will reduce over time as you get older. It is also preferred by many people as it covers mortgage—as the unpaid amount on the mortgage is also likely to decrease over time.
Is a Medical Examination Necessary to Get Life Insurance?
It depends. If you are in good health and have had no major or chronic illness, then there may be no need to go for a medical examination. However, a medical examination or an over-the-phone medical questionnaire is required if you have a history of illness or if you are over a certain age or considering a high level of cover. Any medical examination fees will be paid the life insurance company.
How Much Life Insurance Do You Really Need?
There is no exact answer to this question. It all depends on what you can afford, the age of your children and other requirements. There is no point in getting such an expensive policy that it will stretch you financially to the point where you are unable to pay each premium. It should give you peace of mind, rather than being a constant source of concern. If you have children under the age of six, you could consider a term of 20 years. If they are teenagers you might consider a shorter term, such as 10 years.
So, as you can see, it’s important to understand all the benefits of life insurance in order to get the right policy for your unique needs. It can be confusing and even a bit overwhelming, because there are so many options and important things to consider.
However, there is no need to worry. Best Insurance Quotes helps you get the best life insurance quotes in Ireland! Fill out our fast 30-second quote form to get started right away.