Where do you buy your life assurance?

All life assurance policies are the same? The best place to buy life assurance is online or from your bank? The only thing to consider when buying life assurance is the price? Well in fact the answer to each of these questions is, FALSE!

Life assurance policies differ from provider to provider
The days of life assurance policies all being exactly the same are long gone… With people living longer now than they used to and recovery rates from illnesses improving all the time, the cost of life assurance has fallen significantly in recent years. As a result, the providers now compete both on price and through the addition of valuable policy benefits. Are you aware of the following?

• There are life assurance providers that will give you access to the best doctors from around the world, for a 2nd opinion when you have a serious illness?
• There are life assurance policies that will pay out your benefit immediately while you are alive, if you have been diagnosed with a terminal illness?
• You can get life assurance policies where the cover increases automatically each year, policies that pay out when the first of you or your spouse dies or indeed policies that pay out twice when each of you die.
• You can get life assurance policies to protect yourself, your family, your business partners, key employees, even to protect against you leaving an Inheritance Tax bill when you die.

So all life assurance policies are definitely not the same!

Buying online or from your bank only narrows your options
The problem with buying life assurance online or through your bank is that it will seriously narrow your options. Both of these sales channels will usually only have access to the products of a single life assurance provider. So apart from you potentially not getting access to the cheapest life assurance cover, you may well also miss out on some of the really valuable enhancements available.

A Financial Broker on the other hand has access to a broad range of life assurance products in the Irish market. They will find the right provider, offering the best product at the best price for you and your specific circumstances. They will also do all the work for you in terms of getting the cover arranged!

Life assurance is about more than the price
Of course the price is really important when you are buying life assurance. In fact your Financial Broker will often be able to match the lowest price in the market on the actual product that you want! Now that is really adding value! But your Financial Broker will add far more value than that. Apart from the price and added benefits, they will also consider factors such as,

• The claims payment records of the various providers
• The financial security of the providers
• How easy the providers are to deal with

Your Financial Broker is definitely the best place to buy your life assurance!

Where do you invest €10,000 today?

Well everyone seemingly has an opinion on this question and will give you a quick answer to it! Well that’s anyone with the exception of a Financial Broker, who is unlikely to give you a quick answer to such an important question. Because what to invest in is not about going with fads or trying to pick a winner as you might in a horse race. Instead finding the best investment opportunities needs to based on a very systematic approach and on your own particular circumstances. And that’s where a Financial Broker will help you.

Your Financial Broker will first look to become crystal clear on your investment objectives. Why are you investing? What is your end goal for the money? What is your investment timeframe? It’s only when they get clear on these types of questions that they can start to even think about what to invest in. Investing money in Ireland today is full of opportunities and pitfalls, it is really important that your Financial Broker understands your objectives fully first.

Understanding your attitude to take risk is the next essential step in determining the best investment for you, because what might be considered the best investments in Ireland may not be the right investment for you. At the end of the day, we are all different when it comes to what we consider acceptable risk in relation to our investments. For some people, they want to always get back at least their investment amount after a set period of time, even if this means lower potential returns. For others, they want to aim for the maximum possible returns and can happily sleep at night even if they risk losing some of their money. Your Financial Broker will ask you a series of questions that will help you to determine your personal appetite for risk (are you happy to take risk or not?) and also your capacity to take risk (can you afford to take risk or not?). This will guide them further towards the right investment opportunities for you.

Your Financial Broker will then want to know your full financial circumstances to see where your investments sit in your overall financial affairs, as this may also shape the suitability of individual products.

When they have all of this done, your Financial Broker will then research all of the best investments in Ireland to find the one that suits you. Unlike a bank or life assurance company salesman, they are not tied to advising in relation to the products of one company. They will find the best product to meet your objectives, one that fits with your attitude to risk and that also suits your specific personal circumstances.

So back to the question of where do you invest €10,000 today? We still can’t tell you the answer, but using the services of a Financial Broker will ensure that you end up getting the best result for you.

Critical Illness Cover – Recover your health without financial worries

None of us like to think about getting sick and the worry this would cause for our loved ones and ourselves as we do our best to get well again. The last thing we would need is to be worried about money. Often, this is a real concern. Apart from the impact an illness might have on your income or indeed your business, you may need access to additional cash to pay for care at home, possibly to adapt your home, or to buy medical equipment that will assist your recovery or improve your quality of life. Indeed critical illness cover is often linked to a mortgage, paying off some or the entire mortgage in the event of you getting sick. 

Critical illness cover, sometimes known as serious illness cover (or specified illness cover) is a product designed to remove the financial worry when you suffer one of a specified list of serious illnesses. Critical illness cover has been a very popular addition to the protection portfolios of clients in Ireland for the last 20 or so years, the attraction of it being the availability of an immediate lump sum in the event of a claim.

Is it likely to happen to you? Well hopefully not, but according to the National Cancer Registry Ireland, there are more than 20,000 new cancer cases in Ireland each year. Their statistics also show however dramatic improvement in 5-year survival rates, due to the advancements in medical science. The picture is the same in relation to heart disease and strokes. Approximately 10,000 Irish people have a stroke each year and there are approx. 30,000 people living in the community with disabilities as a result of a stroke, according to The Irish Heart Foundation. But of course while surviving is good news, money is also needed to enable you to recover without worry.

There have been some great innovations in critical illness cover in recent years. While claims are allowed on approx. 40-50 specified illnesses, some insurers will also pay out partial amounts on other illnesses or sometimes for serious accidents. Some insurers also provide cover for children free of charge. It is even possible to access a second medical opinion service with some of these types of financial products.

Where do you find the right critical illness cover for you with the most relevant benefits? This is where your Financial Broker comes in. Unlike a bank with access to the product of a single provider, your Financial Broker has knowledge of and access to products across the marketplace. Depending on your own circumstances, they will find the best critical illness policy with the right set of benefits at the lowest cost to suit your own personal circumstances.  

Getting sick is of course a time of concern. However you can take the financial worry out of it by asking your Financial Broker to find the right critical illness cover for you.

What would you do to save €2000 a year ?

The Central Bank of Ireland recently announced that there are over 100,000 households with mortgages, who could get a better deal by simply switching their mortgage. What most banks rely on is that people will not want to have to go through the hassle of switching, but have you really considered enquiring about reducing your monthly mortgage cost?

Example:

If we use a mortgage of €240,000 on a house worth €300,000 (80% Loan to Value) and a variable rate of 4.5%, the rough cost of interest payments per year is €10,800. Currently, one Mortgage provider offers 3 year fixed rate of 3.6% for mortgages that would yield an annual saving of €2,160. That’s €180 a month less in interest repayments just by moving mortgage providers!

Is there a lot of work involved?

The first step is to put in an enquiry to see if it’s worth your while. This is not a lot of work and shouldn’t take long. If you decide the savings are worthwhile, you would then have to consider if you wanted to proceed with an application.

In this regard, the real question you should ask is “am I prepared to put in a little work getting documents together to make monthly savings on our mortgage?”. Your mortgage provider is hoping that you are prepared to pay more to avoid the hassle involved in switching to a cheaper provider.

Isn’t there a huge cost involved?

There are costs involved but the main costs are usually the legal ones. Some mortgage providers now cover up to €2,000 of potential legal costs. This would make the process far less costly. But even if you had to cover the entire legal fees, if you were saving over €2,000 a year, it would still be a cost saving exercise.

Can I make any other savings?

There is a good chance that many people took mortgages out directly with the banks and were required to take out Life Assurance (e.g. Mortgage protection). In many cases, this was not the cheapest cover available. By reviewing your mortgage you can also review your Life Cover.

How do I know if it’s worth my while?

If you have a mortgage that is currently 90% below the value of your property (90% LTV), you may be able to make substantial annual savings. The lower the Loan to Value (LTV), the better the rate/savings you will be offered.

I am interested, what do I do?

If you contact me by phone/email, I can begin a pre-enquiry. This shouldn’t take long and all you are doing is seeing if it’s worth your while. You are not obliged to proceed and will not incur any cost at this stage. Asides from a few minutes of your time, what do you have to lose?

Income Protection – the important cog in your financial wheel

We all fund our lifestyle by spending our hard-earned income. This income is used to feed ourselves, to pay mortgages, to pay all the bills and to fund our lifestyles; new clothes, nights out and holidays etc. Our income is also used to pay our insurance premiums and hopefully to pay towards retirement planning! So what happens if we get sick or have an accident and this income stops? This is where income protection insurance comes in. A previous term used for this cover was Permanent Health Insurance (PHI).

What is income protection?
Income protection insurance is a product that in the event of you being unable to work due to illness or accident, the insurer will pay you a replacement income until your retirement date. Most Financial Brokers recognise the importance of maintaining an income and recommend to clients that they have adequate replacement income in place, should they be unable to work. For some lucky few individuals, their employer provides this salary protection cover. For most, they may end up reliant on modest state benefits. Indeed for the self-employed, they are entitled to nothing and as a result they really need to get their own income protection insurance in place.

Is income protection the same as payment protection on a mortgage or other loan?
In a word, no. They are not the same product. Payment protection is a product that was predominately offered by banks to cover repayments on a mortgage or loan. However this cover usually only lasted for a year or so and had quite strict conditions attached. In fact payment protection insurance has a very chequered history and indeed was sold to people who often would never be eligible to claim. You may often see in the media that banks are now being forced to refund customers for payment protection policies that were mis-sold in the past.

Income protection is completely different. It covers your income in the event of illness or accident and the benefit is payable until you recover and are able to work again. If you don’t recover, it is payable until you reach your retirement age. In fact the state is supportive of people taking out income protection insurance. You get full tax relief at your highest income tax rate on the premiums you pay. Now this is one of very few ways left to get marginal rate tax relief on anything!

 How much does it cost?
Like most products, it depends. The premium that you pay will depend on a range of factors such as;
• Your age
• Your occupation
• Amount of cover needed
• Your state of health
• Your choices in relation to a range of policy features

Where do you start? The best way to proceed is to contact your Financial Broker who will explain all of the options available and will prepare an income protection quote for you. And because your Financial Broker is impartial and deals with all of the product providers, they will find the best product for you at the lowest price available. You can then rest easy, knowing that at least your income is secure.

Does a Financial Broker offer a different service than your bank?

Financial advice and the products sold by Financial Brokers, banks and life assurance company salespeople attract on-going and rigorous scrutiny by the media and other commentators. And rightly so! Consumers are placing their trust, their hard-earned financial assets and indeed their future lifestyles in the hands of these professionals, and so the industry deserves scrutiny.

The world in which financial advisers live is a highly regulated world. This is important as it helps build trust. But regulation on its own won’t achieve this; best practice has to also be employed by all of the professionals in the industry to help build this trust. Financial Brokers can at least be optimistic that they are continuing to build a greater sense of trust in what they do. In the internationally renowned Edelman Barometer 2015, trust levels in Ireland in financial services businesses continues to exceed that achieved by banks, and indeed financial services businesses showed the fasted growth rates in trust (albeit from a relatively low base).

So why are Financial Brokers more trusted than banks?

They want to build long-term relationships. Financial Brokers are different to bank salespeople as they are not out to achieve this year’s sales target, as passed down from Head Office to your local bank branch. That is the focus of the bank branch as staff change and move around from branch to branch. A Financial Broker on the other hand will only build a successful business if he or she can build loyal, long-term client relationships. They want to support you and provide financial advice as you go through every stage of your life. Thinking about short-term sales targets can never achieve that!

Their advice is impartial. At the end of the day, helping you to identify your financial objectives and developing your financial plan is only part of the financial advice story. You then need the right products in place. While bank staff only have access to the products of one company, your Financial Broker can find the right product for you from right across the market. This can result in cheaper life cover, broader and more suitable investment choices and better pension planning options for you. Your Financial Broker is solely interested in finding the best solution for you, as opposed to potentially force-fitting you into the only product available from a single supplier, as banks do.

Their sole focus is helping you achieve your financial objectives
Banks lend money, they hold deposits, they sell credit cards and (hopefully) they will give you a mortgage. They are, or at least should be good at all of that. But then the bank branch will also try and advise you in relation to your personal financial affairs.

Financial Brokers on the other hand are singularly focused on helping you manage your affairs and achieve your financial ambitions. That’s what they do, and they will travel on the long road with you as you achieve your financial dreams.

Pension and Investment Lessons from the Economic Crash: A Financial Broker Perspective

Think back to the start of 2008. The economic storm clouds were getting darker, there were rumblings about losses building in banks across the globe and investors were beginning to get nervous. And now race forwards 7 years and consider the lessons to be learned with the benefit of hindsight. Like all lessons, these are lessons that can easily be forgotten again!

Research has shown time and time again that “stock picking” investors rarely out-perform the market. Yes some hit lucky and beat the market, but the majority would be better off in a fund that tracks a stock market index, or a professionally managed active fund.

Why is that? At the end of the day, people make poor investment decisions because they are human. They see stock markets racing ahead, and then decide to buy in. Or indeed (as during the economic crash) when there are huge falls in the market, investors decide to jump ship. And of course this is exactly the opposite of what we should do, i.e. buy low and sell high. Your financial adviser will help you to do the right thing, and often that might be to sit tight and do nothing at all. 

Every Financial Broker will know the horror stories of one-way bets and sure things. Surely, if you had a genuine one-way bet, you’d tell no one about it! So the “guaranteed” returns that were coming from apartments in far-flung places and the certain returns from Irish bank shares were shown up for what they are – investments with risks attached, just like all other investments. Your Financial Broker will ensure you have a diversified investment portfolio that matches your risk tolerance. They will caution you against these “sure things”!

In the past, when people were asked about the amount of risk they were happy to take, they bullishly took on more risk, with the hope of gaining greater rewards. However the folly of this approach was laid bare when the crash came and investment losses increased. Many investors realised that they were ill equipped to deal with these losses, either financially or emotionally.

Having a Financial Broker in your corner will help take the emotion out of your investments. Their financial advice will be based on experience and knowledge of the highs and lows of the markets over many investment cycles. Their only interest is in your financial goals and objectives and how best to achieve them. From their experiences as a financial adviser, they have learned that there is no quick route to success.

Instead they will bring rigour and a structured methodology to the financial advice that they offer. So apart from fulfilling their traditional role as your financial adviser, a Financial Broker can be your financial conscience!