Life insurance. What is it? Do I need it? Is it expensive? The only comfort may be that this kind of reaction is common, but you will also be glad to hear that life insurance really isn’t that complicated. As experienced, independent life insurance advisors who help clients understand, choose and set up appropriate cover, GSB Capital Ireland have you covered, and help you decide if a policy is for you.
From costs to cover, mortgages and claims, this life insurance guide discusses the types of policy, what they entail, whether you need it and much more.
What Is Life Insurance and How Does It Work?
Life insurance covers several different types of policy, that come into effect upon a person’s death, or, which also make provision for serious illness or disability. The most commonly known and used life insurance policy is Mortgage Protection – every mortgage holder in Ireland is obligated to take out Mortgage Protection to cover the value of their loan. Quite often people feel that this is sufficient, but even though it helps to pay off a family home if the worst happens, it does nothing to fully offset the loss of income your family would suffer. The remaining family and dependents may still struggle to meet the costs of everyday life.
But “why do I need life insurance”, you might ask. Well, let’s find out.
Why Do I Need Life Insurance?
Questions about life insurance often revolve around its necessity, whether people actually need it in their lives.
The truth is that life insurance, and its importance, can depend on your circumstances. For instance, people with a mortgage or children will see life insurance as an essential. Having it in place means that loved ones are protected in the event of death, that mortgages and debts are paid off. Elsewhere, a policy like income protection ensures a regular income if you cannot work due to illness, injury or a disability.
While life insurance is a great safety net, there are some people who might find it unnecessary. Those who are single, financially independent and without dependents may see it as something to consider down the line. Still, there are many people who tick these boxes that avail of life insurance nonetheless, especially if they want to leave an inheritance or support a family member.
What Does Life Insurance Cover?
Given the scope of cover available under the life insurance umbrella, there are many ways this policy protects you.
Fundamentally, life insurance can cover:
- Death due to an illness, heart attack and stroke.
- Death due to an accident.
- Inability to work due to illness, injury or a disability.
- A mortgage balance in the event of the policyholder’s death.
However, life insurance does not cover death from the likes of illegal activities or high-risk hobbies. Payment will also be withheld if you lied in your application or if the premium has lapsed.
There are also some optional, high-level life insurance options to consider that you can use while you’re still alive. These include the likes of hospital cash cover (a fixed amount for every full day you’re admitted beyond the first 72 hours), personal accident cover and sports injury cover. It’s worth noting that some of these additional covers are only available through specific insurance providers.
How Much Is Life Insurance in Ireland?
No life insurance tips guide would be complete without asking the big questions. So, how much is life insurance in Ireland? The answer is that it varies, although there is a general process everyone goes through to determine a price. When getting a quote, the insurer will query several key factors that will affect the price. These include:
- Age: Older people pay higher premiums.
- Health: Poor health will lead to a higher premium.
- Smoking status: Smokers pay more than non-smokers.
- Coverage amount: If you want a higher payout, your cover will cost more.
- Term length: Longer term periods cost more as they’re a greater risk to the insurer.
Generally, life insurance policies start at between €10-20 per month and can go much higher depending on the above factors. This, of course, may depend on another common question: how much life insurance do I need? Sometimes it can also be how much can I afford.
How Much Life Insurance Do I Need?
Much like the cost of life insurance, the amount you need depends on several factors. Your circumstances and plans for the future will influence your decision, so it’s important to consider where you are and where you see yourself in years to come.
For instance, are you planning on applying for a mortgage? If so, you’ll need mortgage protection. If you want to protect your income in the event of illness, you’ll need income protection. Family living costs and future needs must be accounted for so you don’t come up short in the event of an unfortune situation.
There are also risks of under-insuring and over-insuring, leaving you and yours out of pocket either in the present or future. Again, it’s vital to take the time to assess your situation so that you get life insurance that will be there for you when you need it most.
Do You Need Life Insurance for a Mortgage in Ireland?
The mortgage approval process can be a tedious and tiresome one. Among the many requirements of a successful application is mortgage protection. This is sought by lenders to ensure your mortgage is paid off in the event of death. The payout decreases as you pay off your mortgage, but it will be there for a beneficiary under unfortunate circumstances.
However, mortgage protection is not the same as full life insurance. This pays out a fixed sum upon your death even when your mortgage has been paid off. Full life insurance isn’t required, but it’s an appealing addition if affordable.
Another option is joint mortgage protection. This is when two people on the mortgage are insured, and it comes in two forms:
- Joint Life: This is one payment upon the first death. The policy then ends.
- Dual Life: This pays out twice, on the first death, clearing the mortgage. The policy then pays out again upon the second death; the cost is often only slightly more than a joint policy.
How to Get Life Insurance in Ireland
How to get life insurance can be somewhat of a time-consuming process on your own. You’ll need to begin by assessing your needs and then chase quotes. You’ll need to answer medical questionnaires and provide personal details, information that will be used in the underwriting process. GSB Ireland can take the hard work out of it – providing a personal calculation and assessment, and doing quote comparisons.
Approval timelines vary, as some quotes take only a few minutes but those that require doctor’s checks can take weeks. With so many steps to go through and so many options to choose from, knowing what you want from the outset is crucial.
As independent, experienced life insurance advisors, the team at GSB Capital Ireland can help you:
- Understand your life insurance options.
- Compare policies to give you a complete overview of what’s on offer.
- Help you choose life insurance cover suited to your needs.
- Arrange for your life insurance policy to take effect.
How to Claim Life Insurance
How to claim life insurance depends on your policy and the type of claim you need to make. If, for instance, the claim relates to the policyholder’s death, the beneficiaries will likely deal with it directly. If you’ve been affected by a serious illness, you’ll likely submit a claim yourself.
Paperwork for the submission may include original policy documents, a will, grant of probate or a death certificate; your insurer will clarify what’s required. In Ireland, claims are typically paid out in between two to six weeks, although more straightforward claims could be tidied up much quicker.
Getting the Right Life Insurance Guidance
As you can see, life insurance is much more than your standard insurance policy. It contains many individual components designed to help you through some of the most difficult periods of your life. At the end of the day, it’s a personal policy that you can choose.
Given all the details to decide, professional advice goes a long way. Speaking to the experts ensures you choose the right policy now so that your needs are met in the future, and that a search of the market is done to get the right price. So, if you need help finding a life insurance policy that protects you and your loved ones, contact GSB Capital Ireland today.
