What is Life Cover?
Life Cover often referred to as Term/Life Protection will pay out a lump sum if the life insured dies during the policy term. This level of cover or sum assured is guaranteed when effecting your policy, provided the premiums continue to be paid. Your family can use the money however they choose.
Life Insurance can play a very important part of your of your life together. If you have a family that rely on you providing an income, Life Insurance provides security for the family finances.
As soon as you have responsibility for a mortgage, partner or family, it is prudent to take out life cover. Naturally the cost of life cover gets more expensive the older you get so you may benefit by taking out life cover early.
Life Cover offers you and your family a safety in the event of tragedy. In 2009 the Central Statistics Office showed that around 23% of deaths recorded that year were people who had not reached 65.
It’s important to protect your family’s income if you die. State support is limited in the form of widowers’ pension and because the regular bills will continue undiminished, your family could suffer financial hardship if you die.
We compare the 6 largest life insurers in Ireland. In one simple step we make it easy for you to decide on the right policy.
Why Do I Need Life Cover?
You may need life insurance if:
- Your family or others rely on you for financial or other support – for example, they rely on you for your salary, or the work you do in the home or family business
- You have any loans or debts that your family could not pay if you died. Bear in mind you may already have mortgage protection insurance for your mortgage
- You act as a guarantor on a mortgage for someone
How long (term) can I take out for life cover?
When you apply for Life Cover, you select your amount of cover and the period of time you want to be covered for, from 2 – 50 years (specific life company).
How much is enough cover?
The average claim paid by a leading insurance company in 2013 for males was €92,344 and €81,629 for females. That might sound like plenty, but if you died, how long would €65,000 last for your family?
What is the difference between Single, Joint and Dual Life Cover?
Single Life – Covers only one life insured.
Joint Life – A Joint Life insurance policy covers two lives. Joint life cover will only pay out a benefit on the first claim for that benefit of either insured person. The cover in respect of that benefit will then cease for both lives.
Dual Life – Covers two people independently. Dual cover could potentially pay out two separate payments for each benefit covered. In the event of a claim by one of the lives insured, the cover on the other life insured will continue as before.
What is Indexation?
Also you can apply for indexation or a conversion as an additional benefit. With indexation the amount of life cover you are covered for increases in line with inflation each year. The premium also increase Typically, your life cover and premium rises by 5% and 8% respectively.
Inflation over time, will erode the value of money paid to your estate or dependants so your premium goes up each year to pay for it. A conversion option lets you convert your existing policy into a new one prior to the end of the term. The insurance/life company are obliged to provide you with this cover irrespective of your health at that time. The premium for the new ‘converted’ policy will be based on your age when you convert the policy. Typically, you have to be under 65 to convert your policy, but this varies with different life companies. Effectively you will be able to maintain your life cover as you get older. Conversion option is an additional benefit for which the premium is slightly higher. At Manning Financial we feel this is a significant benefit for an incremental increase in the premium.
What is a Conversion Option?
Additional benefits such as these as well as certain automatic benefits will be explained prior to effecting any life cover with Manning Financial.
I already have Life Cover. Why do I need more?
You need to review your life cover regularly to make sure it’s still appropriate for your circumstances. You may need to top up your life cover if you’ve recently had children, moved home or changed your job. Also, inflation may have reduced the value of any life cover you have taken out in the past, so it’s worth checking whether it would still meet your family’s needs.
Will the amount I pay change during the term of the policy?
No, the premium is fixed throughout the term of your mortgage protection policy and will remain the same once the benefits are not amended during the policy term. However if you have chosen Indexation (Inflation Protection) Option then provided premiums have been paid, the relevant life company will increase the premium and the protection benefits on each policy anniversary by certain %, depending on which life company we have recommended.