Life Insurance: Your Top 10 Questions Answered

Navigating the world of life insurance can be a daunting task and planning for life after you’ve passed isn’t easy. That is why we're here, to demystify the process and provide you with the information you need to make informed decisions about protecting your future. Whether you're a young professional starting your career or a family planning for the long term, here at FitzGerald Flynn Insurances we have a team of Dublin-based financial advisers who are dedicated to helping you secure your financial well-being. In this blog post, we'll address 10 common questions about life insurance in Ireland. Let's dive in and find answers to those burning questions you have!

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What is life insurance, and why do I need it?

Life insurance is a financial protection tool that provides a lump sum payment to your partner, family/dependents upon your death. It offers peace of mind, knowing that your loved ones will be financially secure in case of your unexpected passing. Life insurance can help cover:

1. Replace lost Income.
2. Pay off Mortgages/Loans.
3. Provide an Inheritance.
4. Cover Funeral Expenses.

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How does life insurance work?

By paying a regular premium to a Life company, the company will provide you with Life Cover of a specific amount. This cover will last for an agreed time for a ‘Level Term Policy’. For a ‘Whole of Life Policy’, the cover will last until you pass or until you cease paying the premium. 

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What types of life insurance policies are available in Ireland?

In Ireland, you can find various types of life insurance policies tailored to individual needs. Each type has its unique features and benefits, catering to different financial situations and personal circumstances. Below is a list of some of the various types of life insurance available in Ireland:

• Level Term Life Insurance
• Whole of Life Insurance
• Convertible Term Life Insurance
• Convertible Mortgage Protection/Decreasing Term
• Pension Term Insurance
• Serious Illness Cover
• Accelerated/Stand Alone Serious Illness Cover
• Accidental Death Cover
• Income Protection Insurance
• Business Protection

If you’d like to learn everything there is to know about the various types of life insurance policies available in Ireland, be sure to keep an eye out for a future blog on this topic set to be published. Alternatively, we discuss a few in detail in a previous blog here. For now and for the sake of this blog, here is a quick summary of some of the main policies you should be aware of:

Term Life Insurance:

Term life insurance provides coverage for a specific term, typically ranging from 15 to 30 years. It offers financial protection to your loved ones by guaranteeing a payment in the event of your death during the term of the policy. If you pass away within the specified term, the policy pays out a lump sum to your dependents, providing them with financial support. Term life insurance is often more affordable compared to other types of life insurance, making it an attractive option for those seeking coverage.

Whole Life Insurance:

Whole life insurance provides lifelong coverage, meaning it remains in effect until the policyholder passes away, as long as the premiums are paid. It not only offers a death benefit to your dependents, but a ‘Life Changes Whole of Life Policy’ can offer you access to 70% of the premiums after the 16th year of the policy. Please talk to us at Fitzgerald Flynn concerning this feature. Whole life insurance is designed to provide long-term protection and can serve as a valuable component of your overall financial plan.

Mortgage Protection (Decreasing Term Assurance):

Mortgage protection is a specific type of life insurance that is designed to cover the outstanding balance of your mortgage if you pass away during the term of the policy. It ensures that your loved ones can continue to live in the family home without the burden of mortgage payments. The coverage amount decreases over time, aligning with the decreasing mortgage balance. Mortgage protection provides a valuable safety net, giving you and your family peace of mind knowing that the mortgage will be taken care of in case of your untimely demise.

Serious Illness Cover:

Serious illness cover, also known as critical illness cover, is a type of life insurance that provides a lump sum payment if you are diagnosed with a specified critical illness covered by the policy. The illnesses covered can vary depending on the insurance provider and policy terms. The lump sum payment can help cover medical expenses, ongoing care, loss of income, or necessary lifestyle adjustments during a challenging time. Serious illness cover offers financial support and peace of mind, allowing you to focus on your recovery without worrying about the financial implications.

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How much life insurance coverage do I need?

The amount of life insurance coverage you need depends on various factors such as your age, income, debts, dependants, financial obligations, and future needs. The most important consideration when determining how much life insurance you need is your family. The needs of your children, partner, and other dependents if you were to pass away should be of paramount importance in your decision. A general guideline is to have coverage that is at least 10 times your annual income. However, it’s essential to assess your specific circumstances and consult with a financial advisor to determine the appropriate coverage amount for your situation.

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What factors determine the cost of life insurance premiums in Ireland?

Several factors influence life insurance premiums in Ireland. These include your age, health, occupation, lifestyle choices (such as smoking), the coverage amount, and the type of policy you choose. Generally, younger and healthier individuals with lower-risk profiles tend to have lower premiums. Here at FitzGerald Flynn Insurances we have developed a brand new Instant Life Insurance Calculator that will allow you to get an online life insurance policy quote with the click of a button – try it out using this link here. 

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Why is my life insurance premium so high?

Insurance providers assess the level of risk associated with insuring an individual when creating policies and price the premiums to be paid for that policy accordingly. If you have certain health conditions, engage in high-risk activities or a high-risk occupation, it can result in higher premiums. Additionally, the premiums you pay will vary based on the type of life insurance you have in place. If you are currently paying into a policy you deem to be too high, contact one of our experts today to find out if we can’t find a better policy to suit you. 

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Can I get life insurance coverage if I have pre-existing medical conditions?

Yes, it is possible to obtain life insurance coverage if you have pre-existing medical conditions in Ireland. However, the premium and the terms of coverage may be affected. Insurance providers will assess your health condition and medical history before determining the premium. It’s advisable to disclose all relevant information upfront and work with an experienced insurance adviser who can help find the best options for your situation.

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Life insurance vs. mortgage protection: What's the difference?

The first thing to know is that mortgage protection is a type of life insurance. Life insurance and mortgage protection are similar in that they provide financial security in the event of your death. However, there are some differences between the two. Life insurance offers broader coverage, providing a lump sum payment to dependents that can be used for various purposes. On the other hand, mortgage protection specifically covers the outstanding balance of your mortgage, ensuring that your loved ones can continue living in the family home if you pass away. While mortgage protection is designed to protect your home, life insurance offers more flexibility in how the funds are used.

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Is life insurance required for a mortgage in Ireland?

Life insurance or mortgage protection is generally required by your mortgage provider before you can get a mortgage in Ireland. Without some form of mortgage protection, you likely will not be able to get a mortgage in Ireland. In some cases, mortgage providers may not require a borrower to have mortgage protection in place, however, this is far from the norm for younger borrowers looking to buy a home. Mortgage protection provides an added layer of financial security for both you and the lender, ensuring that the mortgage can be repaid in case of your untimely death.

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‍Can I use life insurance to protect my mortgage?

Yes, life insurance can be used to protect your mortgage in Ireland. By having a life insurance policy with sufficient coverage, you can ensure that the outstanding mortgage balance will be paid off if you pass away. This provides peace of mind, knowing that your family won't face the burden of mortgage payments during a difficult time.

At FitzGerald Flynn Insurances, we believe that life insurance is not just about financial protection, but also about peace of mind. We've covered a range of important questions about life insurance in Ireland, providing you with a solid foundation of knowledge to make informed decisions. Remember, everyone's situation is unique, so it's crucial to consult with our experienced team of financial advisers who can guide you through the process, assess your needs, and help you find the right life insurance policy to protect what matters most.

Don't wait until it's too late. Start planning for your future today. Contact FitzGerald Flynn Insurances, one of Dublin and Ireland’s top insurance providers, and let our dedicated team assist you in securing your financial well-being. Together, we can ensure that your loved ones are protected and that you have the peace of mind to enjoy life to the fullest. Your future is worth investing in, and we're here to help you every step of the way.

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Remember, at FitzGerald Flynn Insurances, we've got you covered!

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