Question 1

What types of Life Insurance do you need at 40?

Accepted Answer

1. Mortgage ProtectionYou’re legally obliged (a nice way of saying ‘made’) to have Mortgage Protection if you get a mortgage in Ireland. If you die before clearing your mortgage, the provider will pay off what’s owed.If you have a family, they’ll get a mortgage-free home which is handy, but they will lose your income.You see, mortgage protection won’t leave them a lump of money to replace your earnings. That’s what life insurance is for…2. Life insuranceThe big cannoli of insurance: if you die, your financial dependents get a lump sum that they can dip into to replace your income.If you’re dead, you’re not earning unless you can get a job as a poltergeist in the next world. Try justifying that to your spouse as the reason for not getting life cover.But what if you don’t actually die, but you fall ill and can’t work – a much more likely event as you get older – can you insure against that?Yessiree Bob.3. Income ProtectionIf you cannot do your job for more than four weeks due to any medical recognised condition, Income Protection (sometimes called Salary Protection) pays you a replacement salary of up to 75 per cent of your income. It will continue to pay out until you get back to work or retire.But it’s not all about staying out of work and getting “free money”, trust me, you’ll soon get bored. The best income protection policies include rehabilitation and retraining benefits so you can return to work and feel like you’re contributing to society again.This one is particularly relevant if you’re a high earner on a solid career path. What would you miss out on if you got sick, and how would your lifestyle suffer? Say goodbye to impromptu weekend ski trips, anyway. You’ve worked bloody hard to get where you are in your career, don’t let illness rob you of your dignity and pride. Nobody wants to become a financial burden – income protection ensures you won’t.Finally, let’s look at the final type of cover available.4. Serious Illness Cover/Specified Illness Cover/Critical Illness CoverSerious Illness Cover is similar to Income Protection because it pays out while you’re above the ground. Think of life insurance and mortgage protection as death insurance, income protection and serious illness coverage are living insurance.Serious illness cover pays a tax-free lump sum if you get any of the illnesses covered in the policy. Currently, there are 98 illnesses covered but 80% of all claims come from the big three:The next eight serious illnesses altogether account for approximately 17% of all claims paidSo the other 87 illnesses account for just 3% of all claims. What I’m trying to get at is don’t be blind-sided by the insurer shouting about covering the largest amount of illnesses. You need to find the insurer that offers the widest definition for the Big 8 illnesses outlined above.

Question 2

What’s the best Life Insurance deal?

Accepted Answer

Let’s get this out of the way: while Life Insurance is magic when your family needs it most, it’s a pain in the arse when you’re coughing up the cash every month, so you want to ensure you get the best one. But is there a “best” life insurance provider?There’s no magic bullet policy for everyone. Your personal situation is unique, so it really does depend. And that’s what makes brokers so handy? They can recommend a suitable level of cover based on your own individual circumstances.However, we do have one guiding question for you:

Question 3

Should you go with a bank, a broker, or straight to the source?

Accepted Answer

Life is short, so let’s fire through this one.The sole advantage of going with a bank is that you get to meet with an actual, living, breathing, hard-selling human instead of doing it at your own pace online. If this puts you at ease, then you should immediately stop reading and hit the bank, as we are 100% online and phone based. You’ll only see me in videos 🙂However, as nice as having a face-to-face with someone, you may be about to get ripped off by that sharp suit.Irish banks can only sell insurance from one company, so they’re a no-go for impartial advice or bagging a deal. Banks also have no underwriting safety net, so if a bank says no, that’s it from them; they can’t shop around to and try another insurer.In other words, avoid the banks if you have any pre-existing health issues.Going direct to an insurer puts you in a similar place because you’re limited to the Life Insurance products that the insurer offers e.g Aviva only sells Aviva products, Irish Life only sells Irish Life products.

Question 4

Top Tips for Getting Life Insurance in your Forties?

Accepted Answer

A couple more tips for you if you’re still not convinced:Don’t get the amount of coverage that you think you should get. Instead, budget for what you can actually afford. Your maths might suggest you need a policy in excess of €1m but there’s no point taking this is it’s unaffordable. You’ll just end up cancelling it. Head over here to determine how much life cover you really need.Consider the term you’ll need. Generally, this ties in with the age of your youngest child so don’t go and buy whole of life or 40 year cover when 25 year cover will do just fine. Your kids only need protection until they can stand on their own two feet (financially, not physically)Don’t disregard reducing life insurance as a way to protect your family. It costs less than level-term life insurance so you can buy more of it initially. This works because you need more cover now when you have more years to retire / more future income to replace.To recap: shop around; get it sorted asap; if you have a family, you need Life Insurance.If you don’t have income protection through work, well, you need income protection too.Capiche?

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