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Life Insurance for Young Families

taking care of the what ifs

Having a baby is great (not that I’d know much about it, we menfolk have to deal with the horrors of man-flu, how unfair would the lord above have been to lumber us with pregnancy too).

 

I jest, of course!

 

But I do remember those days after our kiddos arrived, they sucked – all that projectile puking, pooing and peeing, lack of sleep, making bottles (for one was hard, when the twins came along, jeeessh!) changing nappies, mouli-ing vegetables and worst of all, minding them if you had the sheer audacity/stupidity to have a few beverages the night before. Kill me now!

Some people lie say it’s the best time of their lives – they need help.

They’re the same nutjobs who say your school days are the best time of your life – not unless you enjoyed getting spots, social incompetence and being skint all the time.

But I digress.

No matter how much we hate the wailing, the stench and the constant neediness of our kids, we love them all dearly – don’t we?

DON’T WE??

So we have to make sure they’re ok if we pop our clogs unexpectedly.

Remember, to a baby, we’re not really people. We’re just providers of nice stuff that keeps them warm and alive. If we’re not there to provide for them, who will?

So yeah, basically, we’re all just walking, talking paycheques to little Timmy, Teddy and Tommy. And how do you replace a paycheque?

With a big ole life insurance cheque, of course, and that’s where I come in.

What types of insurance do young families need?

If you want to protect your family with life insurance, you need three types of cover.

Let’s ‘ave a butchers at all three:

By the way, I’m going to assume you have zilch coverage at the moment, either personally or through work. In that case, here’s what you need starting with the most important:

Income Protection

If you’ve just had a baby, you’re probably skint, especially if it’s your first and you’ve just spunked loads of dosh on a top of the range buggy – don’t worry, we’ve all done it. Our firstborn’s buggy came with its own chauffeur, James, and butler, Gieves.  By the time the twins came along, we had much more nous so they were wheeled about in a Tesco trolley propped up with a couple of pillows.

OK, Nick, you know the craic, I’m skint so “how can I afford income protection, it’s probably crazy money”

You’d be surprised how affordable it is, on average, you’re looking at paying 1% of your net monthly income to protect 75% of that income.

1% for 75% coverage – sounds pretty fair to me.

Let’s look at an example to clear things up.

Quote Type: Income Protection
First Person: Non-Smoker, born on 18/08/1981
Cover Amount: €35,944 per year until age 65 (based on earnings of €62,000)
Occupation Class: Software Developer (Class 1)
Deferred Period: 26 weeks

Assuming you pay 40% tax and using the lowest quote below of €76.02

Ip software developer quote

This means the net cost of your income protection is just €45.61 per month net.

Your monthly net income is €3582 per month.

So you would only have to use 1.2% of this to protect your income.

It’s a no-brainer.

Money Machine

I’ve done this analogy to death, but it’s the best I can come up with – if you had a money machine spewing out thousands of euros per month, would you put aside a few quid per month to insure it in case it stopped working.

Darn tootin you would.

You are that money machine, and income protection is your insurance.

Income insurance will pay you a monthly income to replace a portion of your income should you become too sick or injured to work. It’ll continue to pay you until you get back to work or reach retirement age. Income protection will preserve your dignity, you’ve worked too hard to rely on handouts, but more importantly, it will keep a roof over your head.

Read more about income protection.

Life insurance

Although it doesn’t have the “OMG that’s so cuuuuuuuuuuuuuuuuute” factor of teeny, tiny booties – basic life insurance is essential if you have kids.

A life insurance policy is a real-life Superhero for your family.

You can use a life insurance policy proceeds to help cover expenses like the mortgage, creche, and other day-to-day essentials (Sky Sports HD). I recommend life insurance because it gives you affordable protection* that covers you for a specific period of time — like until the rug rats leave and get their own place, yeah, right, as if that’s ever going to happen.

Also, your children get free life insurance when you take out a policy.

*When I say affordable, I mean cheap; if you’re a 35-year-old non-smoker, you can buy half a million worth of 25-year cover for around €30 per month – that’s less than a euro a day. 

Read more about life insurance.

Serious illness cover

Scary fact alert!

According to a global report, Ireland has the third-highest rate of cancer in the world – ranked only behind Australia and New Zealand. Almost 600 people are diagnosed with invasive cancer every week.

If you get cancer or any of the other 60 illnesses covered by serious illness cover, you’re likely to be faced with immediate, unexpected bills:

  • medical bills
  • travel expenses
  • structural modifications for your home

As a parent, unless you have savings or a wealthy benefactor, a serious illness could cripple you financially. Serious illness cover provides a tax-free lump sum when you need it most to give you some breathing space so you can take time off work to get better / spend time with your kids while you can focus on recovery without worrying about money.

Read more about serious illness cover.

Private health insurance

We don’t arrange private health insurance, but personally, I’d recommend it. We have three kids and have used it a lot even though, thankfully, none of the kids has had serious health conditions.

Private health insurance and income protection are the two policies I wouldn’t be without.

Over to you

If you are a new parent, how the hell do you have the time to be reading this article? 🙂

Do you have hired help?

Have you just won €175m in the EuroMillions?

If you have, well, feck life insurance, you’re sorted.

However, if you’re not an overnight millionaire and you’d like some advice on how best to protect your family, please complete this questionnaire.

I’ll be right back with a recommendation over email that we can discuss over email (or we can talk) whenever you get a spare minute.
Nick McGowan
lion.ie | making life insurance easier

 

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