We appreciate that Ireland’s life insurance policy options, can take a lot of time to research, and you may still end up somewhat confused.
How can you be 100% confident of getting unbiased information to ensure that you not only purchase the most suited policy, but also achieve the best possible price. Also, nobody wants to miss out on any free cover periods, or online discounts once they have compared and chosen the correct plan for them.
At One Quote, we want to help simplify your search, and to guide you toward finding the life insurance policy that best suits your needs, as well as your budget.
Depending on your age, family size, debt levels, and of course your income, there may be one type of life insurance more suited for your specific needs than others, whilst price is obviously an additional factor.
So, let us break it down, and explore the basics of how life insurance works, the types of policies available on the Irish Life insurance market, and how you can choose the one best suited to you and your loved ones, whilst also ensuring best value.
The Basics of all Life Insurance
Death Benefit
Life insurance is a policy that provides a death benefit payout (cash sum) to beneficiaries, if you pass away provided the premium payments have been maintained.
Whether you arrange life insurance that lasts your entire life, or for a chosen set period e.g. 25 years, you must pay regular premiums in order for a claim payout to occur.
Beneficiaries
Life insurance policyholders name one or more individuals as their beneficiaries, who will receive the death benefit upon the insured’s passing. Typical examples of beneficiaries include a spouse or partner, children, or other family members. All benefits passing between married couples and civil partners are exempt from Tax.
Premiums
Life insurance policies come with premiums, which are the payments made to maintain coverage. Premiums can vary depending on factors like the type of policy, age, and health of the policyholder, as well as the death benefit amount.
What are the different life insurance policy types?
In Ireland, when it comes to protecting you and your family, there are five distinct life insurance policy types that exist, so it’s important to understand their differences, so you can find the best option. Below is a description of each:
(1) Guaranteed Whole of Life Insurance
Like its name suggests, “whole of life insurance” a permanent coverage type, which lasts your entire life and guaranteed means that the premium is fixed. The upside is that no matter how long you live, a death benefit payout will occur, provided premiums have been maintained.
The downside is that its way more expensive than the more popular alternative guaranteed “term insurance,” which allows you to specify your required policy term (which can go up to age 91).
Whole life insurance may be the best type of coverage, if you have a very sizeable estate and are thinking about inheritance tax planning. Here a special version of this life insurance policy type called Section 72 exists and can be set-up on a joint life second death basis, or single life basis as best suits.
(2) Guaranteed Term Life Insurance
Guaranteed Term Life Insurance is a type of policy that provides coverage for a set term (time period). Guaranteed means that the price cannot be increased by the life insurance company at any time down the road.
For example, you may choose a life insurance term only up to retirement age, or if you can afford it, you can opt for the maximum coverage period, which can run up to your 91st birthday.
Guaranteed term life insurance is the most popular route because of its flexibility, i.e. its ability to allow you to control the policy term and therefore the related cost.
In addition, although it adds around 5% to the premium, choosing to include a “Conversion Option” on your term insurance policy, allows you to extend the length of your original cover period if required, without having to provide any fresh health related evidence at the time.
(3) Unit Linked Whole of Life Insurance
Unit Linked Whole of Life Insurance works a bit differently than both guaranteed term and guaranteed whole life insurance. It is a type of permanent policy that has an investment portion. This portion, otherwise known as the cash value, can grow throughout the life of the policyholder. The problem, however, is that there is no premium guarantee, and the price can be increased after the first 10 years and then every 5 years thereafter.
This type of life insurance plan is no-longer sold on the Irish Life Insurance market, but some legacy policies still exist.
(4) Funeral Expense Insurance
Funeral expense insurance is a type of permanent life policy that offers a small death benefit payout. Beneficiaries can use this payout to cover a funeral related costs. However, because this type of life insurance policy offers no cover in the first 2 years and has extremely expensive premiums relative to the cover offered, they are only suited to people over age 75, or to those who for health reasons would be refused any other type of life insurance.
(5) Mortgage Protection Life Insurance
Although this can be confused by some with home insurance, which is building and contents insurance, mortgage protection, is actually another form of guaranteed term life insurance.
The difference is that the death benefit gets paid directly to your mortgage lender and that because it only needs to cover a reducing mortgage loan, the premium is a lot cheaper than maintaining a level cover, guaranteed term policy.
How to Choose the right Life Insurance Plan Type?
If you are buying a private residence, then the mortgage lender will insist on a “mortgage protection” which is the cheapest form of life cover, as the premium considers that the cover will reduce in line with the reducing mortgage loan balance over time.
However, you can still opt for a level term policy alternative, if you want to and can afford to add cover for your families benefit and not just the banks.
If budgeting and wanting to well protect your family, no matter, if you have a young family, or even an empty nester, “guaranteed term life insurance” is the answer.
If you have a large estate and your real concern is avoiding the tax man, then “whole life insurance” and Section 72 is the only way to go.
Lastly, if you are a business owner, and looking beyond family protection, group life insurance might be the best life insurance option to protect staff, Keyman Insurance to protect business continuity, or Shareholder Protection to maintain business ownership and control.
We want to ensure that you are fully confident in the comprehensiveness of the cover provided and always recommend that you read the customer guides automatically emailed to you, when you run free market comparative life insurance quotes, before contacting us with any questions.
Which Life Insurance Policy is Best my family?
The right type of life insurance policy for you depends on several important factors, which include your current age and health, as well as the level of premiums you can afford.
For most people with a young family, where the need for life insurance is at its greatest, then a “guaranteed term insurance policy,” is most often, the most flexible and affordable option.
How to optimise Family Life Cover?
The need for life insurance is at its highest, when your partner and children, are most financially reliant on your income, but we fully understand the cost of adequately protecting it, adds its own financial pressure. The way to manage the cost, whilst also ensuring your life cover level is sufficient, is to choose a policy to retirement age, but to include a “conversion option.”
This way, your income is protected during your working life, but when your mortgage is cleared and your children are less financially dependent come retirement, you can extend the policy term (up to age 91) and reduce the cover level to minimise the cost. Most importantly, having the conversion option means there is no need for fresh health evidence at the time of conversion.
How Much Insurance Do You Need?
When it comes to the correct level of life insurance to protect your family, it is all about replacing your lost income, if you were no longer in the picture.
If both spouses bring home an income, then a dual cover policy, with different levels of life cover for each salaried income should apply. The multiple of salary should be at least five times and ideally ten times but remember you can factor in any employer provided death-in-service cover levels.
How to Choose the Right Life Insurer?
Even after learning the differences between each type of life insurance plan, it can still provide helpful to discuss the added benefits and policy features, that different life insurance companies provide.
Comparing Standard Extra Benefits
In Ireland, all guaranteed term life insurance policies, include extra benefits as standard, meaning at no added cost to their standard premium.
Most of these benefits are hugely similar and with Royal London Ireland, Zurich, Aviva, and Irish Life all include:
- Accidental Death Benefit
- Funeral Expense Payout
- Guaranteed Insurability
- Terminal Illness Benefit
- Children’s Life Cover
- Second Medical Opinion
However, some of the more expensive guaranteed term life insurance policies, include standard extra benefits that are not typically made available, or that may even prove unique to that life insurance company.
So, you may wish to consider paying that bit more, to have a policy that includes these, or you may prefer to stick to a sticker budget, knowing that the policy will still do its main job and at a lower price.
A standard extra policy benefit that now comes with an Aviva, Irish Life, or New Ireland on a guaranteed term life policy is:
Digital GP: Free online consultation with a registered doctor. Notably, Royal London nor Zurich does not currently provide this, although their life insurance policies are otherwise hugely comprehensive and tend to prove the most competitively priced on the Irish market.
Interestingly, a unique standard extra benefit that is only currently provided under a Zurich guaranteed term life insurance policy is:
Long Term Care Conversion: Designed to convert up to €150,000 of your life cover, into monthly payments, towards long-term care, in the event that life assured has suffered long-term care disablement. A maximum of fifty payments can be made, but you can only make a claim for this benefit between the ages of 60 and 65, on the proviso that there are 10 years remaining on your policy at the time.
We recommend you determine which additional elements are non-negotiable for your needs.
Life Insurance Standard V Optional Benefits and Features
Life insurance can be a complex financial product, so it is important to understand the difference between the core benefits and features that come as standard and the optional benefits and features that add additional cost to any insurers life insurance policy.
Death Benefit is the core benefit with all life insurance policies, and we have already outlined and compared the standard benefits on offer, with guaranteed term life insurance. But there is also an optional core benefit that you can choose to include with guaranteed term life insurance, known as
Specified Serious illness Cover
Choosing to include optional serious illness cover, in additional to your life insurance benefit will mean that a tax-free cash sum would be payable on the diagnosis of one of a range of specified serious illness covered under your chosen life insurance policy. However, as it can add considerable cost, so if choosing this, we recommend keeping this particular benefit level to a multiple of just once annual salary.
Beyond the standard policy features described earlier, optional term life insurance policy features are twofold:
(a) Protection Continuation Option
Protection “Continuation Option” is an optional added benefit, which gives the client the option to extend the term of a plan, without any further medical evidence.
(b) Indexation of Premiums & Benefits
Indexation exists to protect the value of your life insurance overtime, as your income increases, and inflation takes effect, the real value of your life cover will diminish without it.
Comparing Life Insurance Premium Quotes
Getting some numbers in front of you always helps paint a clearer picture. Here you can instantly obtain free, market comparison quotes, using are free life insurance quotes comparison engine.
Securing impartial life insurance recommendations with discount
We work with all the leading insurance companies operating in Ireland, and always provide life insurance recommendations carefully matched to your personal needs. But that is not all, we will also price match all policy types and grant discounts of up to 20% for your entire policy term – Compare Discounted Quotes.
More on Life Insurance for Business
Lastly, here are some other types of life insurance policies you may consider if you’re a business owner.
Key Person Insurance: Designed to protect your business, should a key employee become seriously ill or suffer a premature death.
Shareholder Protection: Exists to support business control, providing the funds to buy back shares in the event of the serious illness, or premature death of a fellow shareholder.
Commercial Loan Protection: A low-cost, simple way of protecting a lender of investor, against your premature death or that of fellow directors.
Easy Life Insurance Application Process
Take these steps to get the right life insurance policy for your needs:
- Choose the appropriate policy type for your mortgage, family, or business needs.
- Run your instant online market comparative, discounted quotes, or contact us with any questions.
- Read your customer guide, before completing and returning your editable application form on screen, with no need for printing.
- Receive your premium confirmation based on your inputted application, together with your secure adobe digital signature request.
- Confirm your required policy start date and receive your policy documents to include the first months insurance coverage absolutely free.
More Information
Here at One Quote Financial Brokers, we provide “real value” financial protection meaning fair and full benefits comparison, hassle-free application, and a best value guarantee.
If you have any questions, please feel free to contact us or call us on: 01 845 0049
