Life Insurance FAQ’s

All you need to know about Life Insurance in Ireland. Find the answers to Life Insurance FAQ’s and learn more about choosing the right life insurance policy for you. You can also watch our video, visit our beginners guide to life insurance, or make a direct enquiry.

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life insurance top-tips
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life insurance top-tips

  1. Life insurance should be used to protect against loss of income up to retirement age and can be extended if required thereafter. Opt for a realistic and affordable cover level.
  2. If covering 2 people, always opt for Dual Cover, over Joint Cover for best value benefits.
  3. Always include a Continuation Option, as it allows cover extension at standard rates, regardless of any change in future health.

 

 

Life Insurance FAQ’s

What is Life Insurance?

Life Insurance pays a lump sum in the event that a person insured dies during the course of the policy term. It is possible to choose a Single Life, Joint or Dual Life Cover policy. It is also possible to use life insurance to protect a mortgage loan, your family, or even your business.

Where there are 2 people on the policy, a joint policy will only pay-out on the first claim and the policy ceases. On dual life policies the policy continues to allow a second claim pay-out.

Are Life Insurance and Life Assurance the same thing?

The short answer is yes, the terms are interchangeable. But strictly speaking life assurance should refer to whole of life cover and life insurance to term cover.

What are the different types of life insurance ?

The are 3 main types of life insurance: Reducing Term, Whole of Life and Level Term.

Reducing Term – Basic cover used to protect certain Mortgages & Personal or Business Loans – see mortgage protection.
Level Term – Used to protect a family, or business against loss of income, as well as to protect mortgage loans.
Whole of Life – Used to fund for inheritance tax payment – see estate planning.

Is the Life Insurance pay-out tax-free?

Life insurance benefit is paid out as a tax-free lump sum. Joint and Dual life policies are paid directly to the second life assured and are always tax-free, as they don’t form part of your estate. Typically, unless you leave a very large estate on your death, your spouse will not have to pay tax on the life insurance pay-out.

However, anyone who inherits the money after your death, depending on their relationship to you, may have to pay inheritance tax. How much tax they pay depends on how much they inherit and Revenue rules at the time of your death. If you have a large estate, you can buy a specific type of life insurance policy, to provide a tax-free lump sum to cover any inheritance tax liabilities that your beneficiaries may have when you die.

Will a Life Insurance claim pay-out, go directly to my wife/family?

If you arrange a policy on your own life only, the benefit is paid directly to your estate and distributed in accordance with your will. Alternatively, you can arrange the policy in trust for payment to whoever you have named as the beneficiary, once the insurer has received proof of your death.

If your spouse or partner takes out a policy on your life, the benefit could be paid to them without going to your estate. If you have a 2 person policy the benefit is usually paid directly to the surviving policyholder named on the policy.

 

How much life cover do I need?

For family protection purposes, the lump sum provided by your policy should be ideally invested to provide an income over a set time frame. For example, based on current interest rates €450,000 life cover would provide an income replacement of circa €30,000 for 20 years.

On average, your total amount of life cover should equate to 2/3rd of net annual income multiplied by your number or years to retirement. Include a continuation option to review and extend cover beyond this.

For how long can I be covered?

You can choose the length of time for which you want life cover up to a maximum age of 90 next birthday. If you choose a shorter term, to say retirement age, you can include a continuation option to extend your cover later.

What’s the difference between joint and dual cover?

Joint cover means the policy will only pay-out one time only on the first to claim of the 2-people covered.

Dual cover, will pay out again, if a subsequent claim occurs during the policy term.

Joint cover is more suited to mortgage loan cover and dual cover to family protection. Dual cover, also allows for different levels of cover on each person as required, so in effect offers better and more flexible cover, at very little extra cost.

What is a continuation option?

For a small additional cost, a continuation option is a very valuable benefit which allows you to extend your cover under a new policy. You can use this option at any stage throughout your policy term, without having to provide any fresh evidence of health.

How long does my quote remain valid?

All quoted premiums assume standard medical acceptance and remain valid for 7 days, based on age each quarter.

Is the premium fixed?

Yes, we quote only guaranteed premiums without reviews. If you choose to inflation protect your cover (3% per annum) by including indexation, the cost will also increase at an average rate of 4% per annum dependent on the insurer.

How does including Serious Illness cover work?

We automatically quote “Accelerated” cover, where a serious illness claim reduces the life cover by the serious illness cover amount. Should you require independent life and serious illness cover levels, please contact us.

How do I ensure best value for money?

We compare all leading life insurance providers in Ireland, to ensure the best cover at the best market price. All life polices offered are free from premium reviews, and our “lowest price guarantee” means we refuse to be beaten.

How do I apply for my life insurance policy?

Once you run your quote, we will email you full cover details along with your online application form. Simply follow the instructions in this email, on how to complete and return your application form.

Will I have to do a medical?

Typically there is no need to do a medical. However, if you are seeking a very high level of cover for your age, or for applicants with a serious ongoing medical condition, a medical exam may be needed. If this is a concern, its best to be upfront and give us a call and we will quickly be able to tell you, what extra medical information will be sought.

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