Life is unpredictable, but insurance exists to protect you from unexpected events or expenses.
You have car insurance, home insurance, health insurance, and even pet insurance. If you run a business in Ireland, then you have a whole host of other insurance products.
If you want to protect your family after you’re gone, you may also buy life insurance.
Why buy life insurance? Use this guide to learn more about the benefits of these financial products.
What Does Life Insurance Offer?
Life insurance offers a payment to a surviving beneficiary after you die. The payment can provide financial security to your survivors in the months and years after you’re gone.
While we all foresee our eventual deaths as just that — an eventuality — being unprepared for a serious illness or premature death can add more devastation to an unexpected loss.
In this way, life insurance is less about building a lump sum over forty or fifty years and more about providing relief to your family if the worst should happen sooner.
How Does Life Insurance Get Paid?
When you purchase life insurance, you agree to pay premiums based on your health and the size of the cover you choose. Some people take out €100,000 in cover while others opt for larger sums. The cover should take into account your current income, your family’s accustomed standard of living, any financial dependent’s, and any debt outwith your mortgage.
You can also opt for different protection plans that include either a lump sum or an income.
A lump sum is a tax-free, cash payment based on your chosen cover and the number of years you paid into your policy.
Receiving the death benefit as an income pays out the policy cover monthly over a term.
How Can Beneficiaries Spend Life Insurance?
For some families, life insurance replaces your income, which can be a real lifeline, particularly as it becomes more difficult to live on a single income in Ireland.
In other cases, a tax-free lump sum ties up any loose ends left at the end of your life without placing an undue financial burden on your survivors.
However, beneficiaries can spend the lump sum in any way they choose. They may use it to:
- Replace a lost income
- Pay for funeral costs
- Erase remaining debts in your name
- Provide for education or child care
- Invest and generate an income
Ultimately, a beneficiary can spend life insurance funds in any way they see fit. So your family may still benefit even if you have no debt, your children are grown, and you have good savings or a pension stored away.
Are you thinking about life insurance in Ireland for the first time? Learn more about the policies available and get a quote in under 30 seconds with Best Insurance Quotes.