Considering Your Needs
We provide life insurance across all policy types, including:
- Family Protection
- Funeral Protection
- Mortgage Protection
- Whole of Life inheritance tax planning
There are many different reasons that you may need life insurance, dependent on your stage in life and the following articles should help you to consider what’s best for you: Young Couples, Young Families, Maturing Families, and Empty Nesters.
Protecting Your Family
When it comes to buying life insurance the type of policy you should choose will be dependent on your own specific needs, but the most popular and generally the most suited for family protection purposes is a Term Life Insurance policy!
Term Life Insurance
Term life insurance is the most straightforward form of life insurance. The price is fixed for your chosen policy term (max to age 91 next birthday) and the cover pays out a tax-free lump sum without fuss to your estate on death.
Whole of Life Assurance
As a Whole of Life Assurance is very expensive in comparison with term life insurance, it is best suited for the purposes of paying inheritance tax, should this be of relevance to the beneficiaries of your estate after their tax-free thresholds are applied.
Term Life Insurance – The Popular Choice
Term Life Insurance allows you to choose to have two people on the same policy and also include serious illness coverage if you so wish.
Below, we explain everything you need to know about “term life insurance” including both the automatic and optional policy benefits and policy features.
The Policy Term
With term life insurance policies, the term can run from 10 years to a maximum of 50 years, but not go beyond age 91 next birthday. If you decide to include specified serious illness cover, the maximum cover term is reduced to age 75.
To keep the cost down and to provide the right coverage amount when it’s needed most, the general recommendation is to take out your cover up to your normal retirement age but to also include a continuation option to allow the choice to extend cover later.
The Cover Level
As a general rule, you should consider a multiple of 10 times your annual income and then deduct any life cover (death in service benefit) already provided by your employer (if any). You should also factor in any debts outside your mortgage not already protected. Please keep in mind that up to retirement age, your life insurance should be set up to replace the loss of income. Once you get to retirement age life insurance is typically more about having adequate funeral insurance.
The Cover Basis
Single cover – One person on the policy.
Joint cover – 2 people on the one policy, but only has 1 pay-out, on the first claim.
Dual cover – 2 people on the same policy, but the policy provides pay-outs on both people, under separate claims.
The price is based on your age, smoker status, and your health. So, you will need to answer some medical questions when making an application. Once your policy commences, the price is fixed.
Term Life Insurance – Automatic Benefits & Features
- Accidental Death Benefit – A lump sum paid in the event of death caused by an accident, when the insurer is still only processing your application form.
- Terminal Illness Benefit – If you are diagnosed with a terminal illness your full life cover sum will be paid out.
- Children’s Life Cover – A lump sum benefit is paid out.
- Guaranteed Insurability – This allows you to increase your Life and or Serious Illness benefits by the lesser of 50% of the original benefit at the start date of the policy and €100,000, without underwriting following certain life events, that may justify a need for increased cover, such as getting married or having a baby.
- Advance Funeral Expense Payment – This allows for an early payout of an amount of life insurance cover at claim stage to cover the cost of a funeral, within certain limits.
Term Life Insurance – Optional Features
Adding a continuation option when originally taking out your policy, allows you the option to extend your cover term after the initial term, right into old age. When your initial policy term is coming to an end, you can then choose to extend your cover term with the advantage of not having to answer any medical questions at the time. You can opt to extend just part of your original cover amount or extend the full cover amount, up as far as age 91 dependent on the insurer.
Inflation Protection Option
Including inflation protection means that both the benefits and premiums will increase at a set percentage on your policies annual anniversary. This allows for the real value of your benefits to be protected into the future. The annual benefit always increases at 3% pa, while the premium may increase at circa 4% pa, dependent on the insurer.
Term Life Insurance – Optional Benefits
Specified Serious Illness Cover
Although life insurance policies don’t pay out on the diagnosis of a Serious Illness, you can add specified serious illness cover to your life insurance plan and pay a higher premium as a result. However, adding serious illness cover to your life insurance policy rather than having two separate policies can be more cost-effective especially if done so on what’s called an “accelerated basis”. An accelerated life and serious illness policy will provide both Serious Illness Cover and Life Cover. If a serious illness claim is paid on this type of policy, the life cover amount is reduced by the amount of the serious illness claim. Whereas, if you die without ever making a serious illness claim, the full life cover payment is made.
Other Specialist Policy Options
Other Kinds of Life Insurance
Apart from the most popular form of family life cover “Term Life Insurance”, there are also other specialist life insurance policies.
Term Life Cover, with a partial whole of life cover
With this type of policy, you stop paying the premium after your chosen cover term, but a proportionate lump sum of up to €50,000 will still be paid out, no matter when the life insurance claim occurs. Although with standard term life insurance, you can maintain the full cover up to age 90, this can be a preferred option for some people, as for an extra cost you are guaranteed a pay-out should you live well into your 90’s or beyond!
Section 72 – Whole of Life Assurance
Estate Planning requires adequate life insurance. If you die leaving assets behind, your spouse will not be subject to inheritance taxes, but your children may well be. Inheritance tax is charged at 33% on all inherited assets above their tax-free threshold and a special type of life insurance policy, known as a Guaranteed Whole of Life – Section 72 Policy, is designed to provide for the payment of this tax.
Under 75’s Funeral Insurance
Funeral Insurance is available to people between the ages of 60 and 74. It provides a discounted fixed-cost life cover plan, with the coverage lasting up to age 91. You will need to complete an application form and answer health-related questions, but there is no automatic medical for life insurance of up to €50,000, provided you have no serious health conditions. You choose the amount of cover (from €10,000 ) and to get you started, we will arrange for your first month’s cover absolutely free!
Tax Deductible Life Cover
Tax Deductible Life Cover is most commonly and sometimes confusingly known as pension term assurance. In a nutshell, it is tax-efficient Life Insurance for workers in non-pensionable employment and for the self-employed including owners of small limited companies. It allows for full tax relief on the premiums at up 40%, if paid personally.
Mortgage Protection is a form of life cover used to protect your lender should a death claim occur during the mortgage loan term. The policy is designed for the cover level to reduce over the term of your policy in line with your outstanding mortgage loan balance. Your lender’s minimum requirement will be for life insurance, but you can also choose to include serious illness cover. It typically makes the most sense to have this policy separate from your family protection policy.
Life Insurance – FAQ's
Life Insurance is an insurance policy that 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.
There are 3 main types of life insurance: Reducing Term, Whole of Life, and Level Term.
- Reducing Term – Used to protect certain regular Mortgages & Personal or Business Loans – see also 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.
We compare the market and grant a 20% discount on the cheapest providers’ price. This cheapest price is then fixed for the full term of your policy and because life insurance gets more expensive as you get older there never any need to switch its best value for life!
Should you choose to add serious illness cover to your life insurance policy you will also be covered for a tax-free lump sum payment in the event of a serious illness claim on one of up to 91 specified serious illnesses. Your policy quote will be on a “life & accelerated serious illness cover” basis meaning that a serious illness claim payout acts as an advance payment of your chosen life cover amount.
Many people think that will live to a ripe old age so life insurance is pointless unless it lasts however long they do. However few people understand that (1) Term Life Cover can last to age 91 next birthday (2) Term life insurance is much cheaper than whole of life insurance (3) Life insurance is not just about covering funeral costs, but much more about protecting your dependants against the loss of your income.
We recommend a higher level of cover up to retirement age and then reducing your cover down in old age and to allow this level of flexibility to include a conversion option in your quote. However, if you’re already retired and you are more concerned about funeral cover then compare the cost of whole of life insurance against term life insurance and opt for what’s affordable!
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.
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.
No. If you have given up tobacco smoking for over 12 months, but you are still using e-cigarettes or any other nicotine replacement products you will still be charged smoker rates. However, once you stop nicotine replacement and tobacco for 12 consecutive months you are eligible for non-smoker rates!
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 of years to retirement. Include a continuation option to review and extend cover beyond this.
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 for 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.
For a small additional cost, a continuation option is a very valuable benefit that 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.
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.
Comparing life insurance quotes is easy with Covermore Financial! Just fill in some simple details such as your age, the amount of cover you want, and the term the policy should run for using our online comparison service, and we’ll compare policies from all the main insurance providers in Ireland and produce your best value quote in just seconds.
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, it’s 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.
It depends on the condition, how serious it is, and how progressive it is! The underwriters will seek specific information from you and sometimes your GP or consultant, before confirming its effect if any!
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 apply by telephone and email. It will also include a link to your Customer Guide so that you can easily check out your policy coverage options!
You will need to answer health-related questions and in some cases, additional health questionnaires may be required. Dependent on your age and cover level a GP attendance report may also be sought.
Your life insurance quote will remain fixed until your next birthday occurs. Once your life insurance policy starts your premium remains fixed unless you increase your cover level.