When we think about life insurance, some of us reckon on living to a ripe old age and think only of “Whole of Life Assurance” not knowing that other much better value options exist, and on a fixed price basis.
The fact is if you have loved ones to support, having a strong level of life insurance is essential during your working life, as this is when your income would be hugely missed and your loved ones would most suffer without it!
Whole of life insurance will last as long as you’re happy to keep up the payments and for as long as you live, but it’s wiser to examine the cost and policy alternatives.
It’s smartest to have a high level of cover during our working life, say to age 65, and then reduce the cover after that. Why? because, once your kids are grown and both you and you and your partner are nearing retirement, your family is much less dependent on your income.
Okay but, getting a life insurance pay-out after retirement age also makes sense too – yes of course!
So, to keep the cost down while having a sufficient cover term, you can choose a policy term to around age 65, but include what’s called a continuation option, this way you can extend the cover term without having to provide any fresh medical evidence in the future.
This way, you will only pay for the cover to age 65, (or whatever ceasing age is chosen) and you can then reduce the cover when extending the term, to your chosen older age (up to age 91).
Whole of Life Assurance
Guaranteed Whole of life assurance still has its place, it’s just not for most people who are looking to protect their loved ones, due to its excessive cost. The only occasion where a whole-of-life policy really makes sense is for an Inheritance tax provision – to leave money to cover inheritance taxes, that your children may incur following on from your death. This will only apply after their tax-free inheritance tax thresholds have been applied.
Partial Whole of Life Insurance
If you’re still convinced that you will live beyond age 90 and want to ensure a pay-out, no matter what, then there is another life insurance option called “Partial Whole of Life Assurance”.
This type of policy is dearer than “Guaranteed Term” but a lot cheaper than “Guaranteed Whole of Life”. It works by having part of your life cover set up on a term basis and part on a whole-of-life basis.
To find out more about your best value life insurance options, visit our Learn More page, or call us on: 01 845 0049
Ken O’Gorman – QFA
OneQuote.ie | Smart Financial Protection
