How would you pay your mortgage and bills should your income stop?

One in four Irish workers worries regularly about loss of earnings due to illness or injury.

Being unable to work and provide for their families due to illness, injury or death is a significant worry for Irish workers. Over a third worry about it at least once a month, while 13% said it was on their minds on a daily basis. Despite this anxiety, we are more likely to insure our pets and our gadgets than we are to insure our ability to earn a living. That’s according to research recently carried out by Red C on behalf of Aviva.

Only 6% of respondents said they held Income Protection insurance, even though, overall 85% admitted they worry about the prospect of illness or injury preventing them from providing for their family.  More than three in five said they were concerned about mental illness keeping them out of work.

Asked how they would manage in the event of being unable to work due to illness, injury, or death the vast majority (62%) said they would rely on social welfare. Yet half of all respondents had no idea how much they would be entitled to if they were unable to work and only 17% could quote the exact amount of the state disability benefit, which currently stands at €230.31 a week. One in four said they would rely on their savings in the event of ill-health: the survey found that average annual household savings amount to under €6,000.

Researchers also found that almost a quarter (22%) of Irish adults have experienced a significant loss of income due to illness, injury or death of a main breadwinner. A third of those affected by such a loss got into debt and another third had to move out of their homes.

Among the minority who have Income Protection insurance, almost 70% bought it themselves, either through a financial broker or directly from an insurance company. Just a quarter said their insurance was provided by their employer.

Life Insurance pays out a fixed amount, so it's the ideal way to help give your family a financial safety net if the worst were to happen.

Income Protection Insurance is there for you when your income isn’t.  It can help safeguard your lifestyle by providing you with a monthly income, should you be unable to work for a period of time, due to illness or injury.

Funeral Payment Helping Hand

The death of a loved one is always a traumatic time. But, in the midst of the grieving process, a funeral needs to be arranged and ultimately paid for. This is done by means of a grant of probate. This process can take a long time to complete. In such cases, the probate process must be complete before a full claim is paid. Research indicates that, on average, it takes 489 days to receive a grant of probate in Ireland.

This could cause a significant impact to your family’s financial position during the intervening period. This means that even though you have taken positive measures to protect your family financially, if you were to pass away there may not be immediate funds available to pay for a funeral.

A leading Life Company has introduced a feature which can help to bridge that gap. The company will pay for Funeral Director costs where they accept a death claim but payment is delayed due to probate. They will pay an advance payment of the cover in place, up to the value of €10,000, to cover Funeral Director Costs. The Funeral costs will then be deducted from the lump sum the policy will provide, as soon as a grant of probate has been achieved.

The Payment

This advance payment is only available to cover costs from Funeral Directors, which can include: a coffin, burial costs, church fees, cremation, death notices, plot, services of Funeral Director, e.g. hearse/car.

The payment will be made to the Funeral Director directly or to the Executor(s) of the estate. Brokers and Executor(s)/Solicitors acting on behalf of the family will be notified of this payment once it has been made. This feature is limited to death claims and only covers Funeral Director costs up to a maximum value of €10,000.

How can my family avail of the Funeral Payment Helping Hand?

  • They can make contact with your Financial Broker as soon as possible and where probate may be an issue or delayed, your Broker will explain the policy and make contact with the Life Company on your behalf.

  • The Funeral Director’s invoice or receipt will then be required.

  • Payment will be made to the Funeral Director directly or to the Executor(s) of the estate.

  • The Broker will let the relevant people know, e.g. Executor(s)/Solicitors, once the advance payment has been made.

Life Assurance That Guarantees Cashback

The primary benefit of Life Assurance is to financially protect a family in the event of a death. When deciding if you need Life Assurance the kind of questions you should consider:

  • How will my family adjust financially if my partner or I die?

  • Will my mortgage be paid off?

  • Will my loans be paid off?

  • What sort of lifestyle will I be able to maintain?

  • Have I appropriate provisions in place long term?

  • Would I be able to afford to not work for a period of time?

In most cases, Life Assurance has a set amount of Life cover and a set time period. The average Life Assurance policy is cancelled within 8 years which means that many people will be taking out a new policy and will not receive any benefits from their current plan. There is generally no value on these policies unless you are making a claim.

A Life Assurance company has recently introduced a Whole of Life cover that offers you several options once you have passed 16 years. Once you have paid into it for this term, every year thereafter you will have an option to continue paying, encash the policy (receiving 70% of your premiums back) or stop paying for the cover and you will maintain a specified amount of Life cover forever.

Here is an example for a person who is 45 years of age, a non smoker who takes out €100,000 Whole of Life cover. The cost of this would be €111.66 per month (half the cover would cost roughly half the price). Let’s imagine they are retiring at 65 years of age, so they have paid into this plan for 20 years at that stage but they want to know what options they have at that time:

  1. Change Nothing:  They can continue paying this policy. The premium will always be €111.66 and the Life cover will remain at €100,000 while they continue payments.

  2. Guaranteed Life Cover €35,023: They can cease paying the €111.66 per month premium. They would be told at that time that they will have €35,023 Guaranteed Life assurance for the remainder of their life.

  3. Guaranteed Cashback €17,644: They can cease paying the €111.66 per month premium. They would be entitled to encash the policy for a guaranteed €17,644. There would be no further cover from this policy.

Unlike some of the older whole of life “with savings/encashment” benefits, these are not investment policies. The figures are guaranteed and you can see the different options available from year 16 onwards (every year you pay beyond year 16 increases the offer available). If the policy is cancelled before 16 years, then the above options are not available.

Survey reveals more women (36%) than men (24%) think that personal responsibility is at the core of overcoming the obesity epidemic

 A survey from a well known protection provider has revealed 48% of Irish people believe that the way to tackle the rising national obesity levels is through school-level education. A survey commissioned by the leading life assurance provider asked 1,000 people throughout the country their views on how they think Ireland’s expanding waist lines should be addressed.

The survey found a split in opinions between genders and age divides as to what is considered the most effective approach. More women than men, 36% as opposed to 24%, believe it’s up to each individual themselves to take personal responsibility if this is a health issue they face; with this view being most prevalent amongst those aged over 55 (46%).

While the healthy living lifestyle trend appears to be very popular in Ireland today, from the booming gym and personal training industries to the popularity of ‘healthy living’ advocates, such as TV personalities and bloggers, it’s hard to believe that now only 40% of Irish people are at a healthy weight.  

Obesity and its impact on Life Assurance

Life cover is different from most insurance products because it is priced based on a number of key criteria which take into account the insured individual’s lifestyle. It is one of the few insurance products which is tailored specifically for the person insured.

This usually means the healthier you are, the lower the cost of the cover. A person’s medical history and lifestyle always comes into play when underwriting life assurance as the cost of cover is based not only on the sum assured and the length of the policy, but also on the individual’s age, state of health and certain lifestyle factors. So, if you smoke, drink a lot of alcohol or are obese, your premiums will be higher to reflect the increased risks to insure someone that has a greater chance of medical issues and shortened life expectancy associated with smoking, liver damage and obesity.

Life companies follow a matrix compiled by reinsurers which give ratings for specific lifestyle factors which are analysed to determine pricing.  It’s important to note that if someone is about 10 pounds over their ‘ideal’ weight, the cost of their life cover should not be affected. If an individual is looking for life cover and would like to know more about how their weight or lifestyle may affect it, why not contact a Financial Broker. A Financial Broker will be happy to provide expert guidance around the available options based on individual needs.

 

Irish worrying less about money, health is still biggest focus……

According to research commissioned by a leading protection specialist, 37% of Irish people view money as their biggest worry this year. What is particularly noteworthy about these findings is that this is almost 10% less than the 46% who said that money was their biggest concern in 2016. The survey asked 1,000 respondents nationwide what their biggest worries were and what their biggest focus was in 2017.

Health was cited as the majority of people’s main focus (37%), followed by career (26%) and travel (13%). What is surprising is that there has been quite a drop in the number of people who identified money as their biggest concern in 2017 when compared with last year. This could this be an indicator that things are on the up for people financially as Ireland is on track to have the EU’s fastest growing economy for the fourth successive year and has a decreasing unemployment rate which last month was at a near 9-year low.

The survey found that after money, 22% worried about their family most in 2017, a big jump from the 14% who said the same the previous year. Meanwhile double the number of respondents said they were concerned with loneliness compared to 2016; 8% versus 4% respectively.

The survey results also highlighted the large difference that exists between the priorities of the younger and older generations surveyed. For 18-34 year olds the focus lies, understandably, much
more on their career (42%), health (19%) and family (13%). While an equal amount of 18-34 year old respondents (10%) said property and travel were at the forefront of their minds. For over 55s their
biggest priority was their health (60%) and travelling (27%).

Overall health is a big focus for every age group surveyed. It is the top focus for 35-54 year olds and over 55s whilst it is the second top focus for 18-34 year olds. One of the ways people are prioritising their health is shown by the uptake in more Health Insurance policies. The largest uptake increase has seen people in their 40s taking out policies, with almost 33,000 people between the ages of 40 and 49 joining a scheme since the start of 2015. As people are becoming more informed and involved in protecting themselves, there has been a noticeable increase in people interested in discussing Serious Illness cover and Salary Protection cover.

There is no escaping that money is still a big worry for many people throughout the country. Unfortunately managing household finances can be challenging. The thought about what might happen in the future that could adversely affect family finances, is never far from peoples’ minds, it would appear. Making contact with a local Financial Broker to discuss personal finances and the options available to people may be one way of helping to alleviate this worry.

3 things you might not know about Mortgage Protection Insurance

Mortgage Protection Insurance is life assurance cover that will clear your mortgage in the event of your (or your spouse’s) death. While it is obviously very necessary, taking out this cover often comes at a bad time for consumers, who are to the pin of their collars facing a new mortgage and all of the costs associated with a new house. For this reason, it is really important that you get the best (often the cheapest!) cover in place. Here are three points that you may not have known about mortgage protection insurance, that just might help you to get the right policy for you.

You don’t have to take out this policy with your bank. Your bank may arrange your mortgage for you. They may also insist on you having mortgage protection insurance in place as a condition of your loan. That is their right. However they cannot by law insist on you taking out this policy with them and cannot make the loan conditional on you doing so. You retain the right to take out any mortgage protection policy available in the market, once you ensure the required amount of cover is in place.

Now this is really important!

Your bank will usually have access to the policies of a single life assurance company. However your Financial Broker will have access to policies of all of the insurers in the Irish market, making sure that you get the very best / cheapest policy to meet your needs. Your bank must accept this policy.

Your cover does not have to decrease in line with the mortgage

The life assurance cover within traditional mortgage protection policies decreases in line with the outstanding mortgage amount. This is the minimum amount of cover that you must have in place – enough to clear the loan at any stage during the lifetime of the mortgage.

However you can have more cover in place. As part of a wider financial plan developed by your Financial Broker, you might choose to have a level amount of cover that will not fall, possibly for the original mortgage amount. In the event of death, the life cover amount will then be greater than the mortgage due, as some of the mortgage will have been repaid in the meantime. This excess cover is simply then paid to your estate.

There are many other benefits available

One of the benefits of taking out your Mortgage Protection insurance through your Financial Broker is that you can tap in to their knowledge of all of the plans that are available in the market, and access features that might not be available through the policy offered by your bank.

There are many other potential feature and benefits available through different insurers in the Irish market, and some of these features might just be very important to you. So talk to your Financial Broker and get the best policy in place for you!

 

Get your life assurance while you’re young!

Some people make the mistake that life assurance is only for middle aged and older people, who are starting to question their mortality. In fact it is viewed only as a necessary evil by younger people, many of whom only take out cover when they are forced to, for example when getting a mortgage.

But actually it makes a huge amount of sense to get life cover in place while you are still young, for a number of reasons

Life cover is cheaper (for the duration of the policy) for younger people
Life cover gets progressively more expensive as you age. Younger people get cover at the lowest premiums and under most term assurance policies, this price is then locked in for the full duration of the policy. So yes, while there is a small premium to be paid for cover (as opposed to no premium payable if you don’t have any cover), this premium then remains at this same level out into the future.

You’re healthier and more likely to get better terms (for the duration of the policy)
Young people are generally healthier than older people. That’s a simple fact. And because they are healthier and may not as yet have suffered medical conditions that they are destined to face in later life, young people find it easier to access life assurance cover at the lowest rates. If you are unfortunate enough to be diagnosed with any sort of a serious condition in later life, you can expect that your life assurance cover will be more expensive as a result of loadings to reflect your medical condition, as well as the fact that you are older. So getting life cover in place while you are young and healthy will help you avoid premium loadings.

You’ve less negative family history to impact the cost
Similar to the last point, another factor that impacts access to and the cost of life assurance cover is family history. If for example there is a family history of chronic illnesses, this will negatively affect your life assurance policy. Younger people have younger (and generally more healthy) parents. This means a more positive family medical history, and as a result more favourable policy terms.

You can protect yourself against future policy changes
Life assurance policies evolve in line with changing circumstances. When we think back to the likes of the HIV and AIDS epidemic of the 1980’s, one of the immediate impacts of this was a 15% hike in the cost of life assurance policies. Of course this hike only applied to new policies taken out from that point forwards. So getting in at a young age protects you against such future events. Of course if premium rates reduce (which they have also done from time to time), there is nothing to stop you switching to a new, cheaper policy. So you can win both ways!

Lots of reasons to consider life assurance in your early years....

Mortgage Protection: the Costs v the Benefits

Mortgage protection is often viewed as a grudge purchase. A necessary evil insisted upon by banks when consumers are at the pin of their collars, trying to buy a new home. But is this the right way to look at it? Because of the financial pressure people are under when starting out with a mortgage, they often forget about the benefit that they are actually paying for.

First of all - the Costs
Mortgage protection is actually a cheap form of life assurance. This is because the level of cover reduces in line with your reducing mortgage balance, unlike more traditional life assurance cover that remains constant (or even increases) during the life of the policy. Remember, the purpose of this cover is simply to repay your mortgage in the event of your death. 

There are other reasons behind the cost of this insurance for your life usually being quite low. Mortgage borrowers are often young couples, which in itself results in lower premium rates for them. On top of this, non-smokers see significant reductions in rates in comparison to smokers.

We’ve also seen a significant reduction in premium rates in Irish life assurance policies in recent years. This has been as a result of more favourable claims statistics – less people dying young, due to significant strides in medical science in the last few decades.

Even aside from these factors though, you want to ensure that you are availing of the lowest cost cover in the market! To do this, you need to engage the services of a Financial Broker who will find the best insurance quotes in the market for you. This is a job your bank cannot do – they are stuck with the products of a single provider.

And did you know that your bank cannot insist on you taking out the life assurance policy with them? They can only insist on the cover being in place. So stand up for your rights (and your pocket!) and ensure you get the lowest cost cover in place through your Financial Broker.

The Benefit
Don’t forget the benefit! The primary benefit of mortgage protection cover is the security that it gives you. The comfort of knowing that should you or your spouse die, your family home is secure and is one less worry for the bereaved to deal with.

None of us like to give these situations too much thought… But it is important to consider that in the event of a death in the family, this often results in the loss of an income, sometimes the sole income coming into the household. Then the mortgage repayments become a problem and then the bank is chasing you. All on top of your grief of losing a loved one.

So recognise the comforting benefit of this cheap life assurance. Talk to your Financial Broker about getting the best insurance quotes for you. Get your cover in place and enjoy your new home without worries.