I have received many queries about different kinds of Life cover over the last few months. There are different kinds of Life Assurances, but most recently there was a specific one (reviewable life cover) highlighted on the Joe Duffy show. Very long story short, the cost of this cover is reviewed every 5 to 10 years and in most cases the monthly cost increases, particularly when a person is getting into their retirement years.
The normal alternative for people is to take out a different whole of life (non reviewable) cover or a cheaper Term Assurance option. In these alternatives you have to keep paying the premiums until either there is a Life Assurance claim or the policy term finishes.
But there is a third option that has recently been made available; it is a life policy whereby you take out cover for a specified period of time. After this time elapses you will stop paying premiums, but you will continue to have life cover so there is a guaranteed pay-out on death.
Male – Aged 60 – Non Smoker - €50,000 Life Assurance for 20 Years - €77.18 per month
In this example the person has €50,000 life cover during the 20 years while they pay their €77.18 per month. After 20 years, this person stops paying the €77.18 per month and they will continue to have €20,000 Life Assurance. The total maximum premiums paid during this term will be €18,523, yet once all the monthly premiums are paid; there is a guaranteed life assurance pay-out of €20,000.
As with all life assurance applications, this is subject to medical underwriting. Some people decide not to even apply for Life Assurance because they think they may be hindered by a personal or family medical condition. This is not always the case; you have nothing to lose by sending in an application and finding out one way or another.
Some people like to target their retirement age (65-75) so that the cost of the cover will cease around the time their income reduces at retirement. This sort of cover can be taken out for as short as a 10 year term (so in the above example the cover would last for 10 years after which they would stop paying the premiums and the €20,000 Life cover would continue).
The biggest advantage to this cover is that you know from the start exactly how much cover you will have at all times and how much it will cost. The monthly cost and the cover will remain the same unless you choose to have an increasing option (where the cover increases yearly).