Life insurance is a smart financial decision that will protect your loved ones when you’re no longer around.
Life Insurance in Ireland is notoriously complicated. The good news is that there are only two main types of life insurance on the market in Ireland: whole of life insurance and term life insurance.
Keep reading for a quick life insurance explainer.
Whole of Life Insurance 101
A whole of life policy covers you from the day you begin your policy until the day you die, even if you miss a premium payment.
When you die, it pays out a tax-free payment to either the other policyholder (if you bought joint life insurance) or whomever you named as the beneficiary in your will. The payment may be a lump sum or could come in the form of an income.
Within whole of life, you typically have one option: Guaranteed Whole of Life
Guaranteed Whole of Life is a relatively simple product. You sign up, continue to pay your premiums, and your family enjoys the benefit. You can switch plans or insurers, but if you are happy with your cover, then you won’t see any changes.
Whole of Life is the most expensive health insurance, so it’s important to consider your current and projected finances. Often, Whole Of Life might be used for a specific goal, such as providing for a child with special needs.
Can I Still Purchase a Reviewable Whole of Life Policy?
Reviewable Whole of Life differs substantially from Guaranteed coverage. Although it models itself as a type of whole of life insurance, it doesn’t guarantee cover for the rest of your life. Instead, the insurer reviews your cover every ten years and then every five years or one year as you age.
Most of these policies were sold between the 1980s and early 2000s, and they have been subject to many Ombudsman complaints as well as legislative review by the Department of Finance.
While you’re unlikely to see these as an option today, Reviewable policies are usually best to avoid unless they absolutely make sense.
Term Life Insurance Cover 101
Term Life Insurance Cover offers coverage for a predetermined term, usually 10, 20, or 30 years. If you die within the term, then it pays out the death benefit. However, you can extend your coverage without submitting to another health check for a fee.
Term Life Insurance is more flexible and usually less expensive than Whole of Life insurance because there’s no guarantee the insurer will need to pay the claim. It is a great way to get cover without locking yourself into a fixed and ever-increasing bill for coverage you may not end up needing 30 or 40 years from now.
Are you deciding between Whole of Life and Term Life Insurance? Learn more about your options and get some of the best life insurance quotes in Ireland in under 30 seconds with Best Insurance Quotes.