Did you also know....?

Did you know... you can get Whole of Life cover which offers you several options once you have paid into it for 16 years. Following this time, every year thereafter you will have an option to continue paying or encash the policy (receiving up to 70% of your premiums back) or stop paying for the cover and you will maintain a specified amount of Life cover forever.

Did you know... Aviva Best Doctors is a second medical opinion for any chronic or troubling ailments affecting quality of life. Your partner, your children and your parents are automatically included on this benefit. The list of best doctors around the world may clarify that you are getting the best care/treatment or they may recommend an alternative (or newer) treatment. For example, sports injuries, skin diseases, cancer, blood diseases to name just a few. This feature is available at no additional cost and Aviva will match the lowest market price available for the cover.

Did you know... a Financial Broker has access to the best prices and special offers that are not always available through individual financial institutions and in most cases can save you money on a policy. A broker is not tied to one provider so can compare companies to find the best deal and price.

Did you know... some people may be hesitant to apply for life assurance for personal health reasons. I recently helped a 63-year-old client to obtain life assurance cover even after she went through an aggressive form of breast cancer 7 years ago. Even if she had been declined in this application, since she was under 80 years of age, there is an over-50’s life policy available to apply for irrespective of your health.

Did you know... that some people are able to drawdown all their pension funds into their hands as cash. This can be dependent on the type of pension you hold and the amount in that pension.

Did you know… that tax refund/relief is available for people who take out salary protection which pays them an income if they cannot work due to illness or injury. This tax relief is like a pension contribution and is at your standard rate of income tax (20% or 40%). So, if you were paying €50 per month, you would receive tax relief/refund of €10-€20 per month.

Did you know… that a lot of self employed people take out salary protection, life cover and make pension contributions where the company pays the premium.

Did you know....?

Did you know... after the recent budget many people will now get full access to their Approved Minimum Retirement Fund (AMRF). This is the case when their annual state pension is over €12,700 per year.

Did you know... the inheritance threshold for children is now €320,000 before tax is due. This means that they can inherit up to €320,000 from your estate but everything over this amount is subject to Capital Gains Tax of 33%. This tax will accrue interest very quickly if not paid when it falls due.

Did you know... both parents can avail of an annual gift exemption for their child up to €3,000 per year without it counting as inheritance. Parents can setup an annual savings plan of up to €3,000 per year (paid monthly if desired) with their child as the benefactor which can be a way of utilising the annual exemption over a long period of time.

Did you know... most life assurance companies are treating vape smokers as full smokers. This can potentially double the cost of all assurances. There is still currently one company that doesn’t charge smokers the full extra cost.

Did you know... most people take out life assurance (mortgage protection), when they take out a mortgage. In some cases this is directly through the mortgage provider who cannot offer the most competitive cover or the best benefits.

Did you know... not all life assurance is the same. Some life companies have extra benefits for free on their life cover plans. For example, some companies have an extra benefit which allows you, your children and your parents’ access to a second opinion professional service.

Did you know... some companies have more life cover and serious illness coverage for children. One company in particular offers up to €25,000 serious illness cover for children, hospital cash payments and overseas children’s cover.

Did you know... in most cases these extra benefits do not cost anymore because the life companies will price match with their nearest competitor. What frequently happens is that it is easier for people to take out life assurance with the mortgage so many people are losing out on benefits because they have not reviewed what they were covered for initially.

Did you know... many people I meet for the first time are not aware of their pension entitlements at retirement. Most people know that they should save into a pension for retirement but they may not understand what they will be getting from their pension at retirement. As a rule of thumb you are normally entitled to a tax free lump sum from your pension and the remainder of it is income subject to income tax.

Case Study: “I don’t really know what we have, how can you help and if so, how much will it cost?”

Enquiry:

I received a call from Mary, a potential new client, asking me how I could help her and her husband to understand their current cover and pension provisions. She stated she had a mortgage protection policy but wasn’t sure exactly what this covered. She remembered her partner (Peter) taking out an insurance policy which included some illness cover but didn’t remember exactly why they had the policy. They both had various pensions with different companies and employers and she wanted to see if it would be worthwhile merging them.

Cost:

Mary hadn’t previously used a broker so was a bit apprehensive. “Before we go any further, what is the cost for you to review our policy’s?” I responded with “If you are happy for me to be your broker on these policies, there is no additional cost for you.” Mary: “But how do you get paid?” Me: “In many cases a broker’s fee is included in a policy whether you use a broker or not. You can request a fee-based charge which I can calculate based on work required but this will not reduce the cost of your existing plans.” In short, most people prefer to pay through fees paid direct from the pension/life providers.

Information gathering:

Mary asked me to investigate their policies and I informed her that if both partners simply sign a document entrusting me as her broker, I could obtain all the information required to review her policies. Mary asked if this would change her policies in any way or cost her more money. I reassured her that this just allowed me to discuss her policies with the companies but that it did not authorise me to make any changes or give any instructions that would impact these plans. I emailed this one-page document to Mary and they both signed and returned it to me.

Meeting:

I met with Mary and Peter following my review and was able to outline the exact cover and pension savings they currently held, along with the pro’s/con’s to making changes or leaving in place. They informed me of their priorities and as their children were in their teens there wasn’t a necessity for as much life assurance, so they decided to direct more of their funds towards their pension.

Peter had become a non-smoker, so a cheaper price or more cover for the same cost became available to him. Mary had the option to combine two pension plans, however she was better off moving it into a pension bond in her own name. If she had chosen to combine, she would have lost a tax-free lump sum option that was unavailable in her existing employers pension plan.  

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.

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.

The future of financial advice in Ireland

So this is where we take out our crystal ball! Consumers sometimes are not clear about the value of financial advice, a situation that we are trying very hard to change. We know the value that is offered every day by Financial Brokers the length and breadth of the country, so here are a few thoughts on what you can expect to gain from seeking financial advice from a professional Financial Broker. The good news is that this future has now pretty much arrived! A good Financial Broker will deliver on these today.

Consumers don’t want conflicted advice
This is probably the key point. Consumers want advice and financial solutions that are based on their specific goals and objectives, and not those of the person giving the advice. The independence of the advice giver is critical here, they need to be able to seek out and provide the very best solution in the market for the client. The days of “force fitting” clients to the single product solution that is the only one available to a product seller are long gone. The solution must start and end with the client – their specific goals, their requirements and their specific circumstances.

Financial Brokers are not aligned to any one organisation and can advice upon the products of many organisations. Their advice starts and ends with the client, not the products available to them.

Consumers want clear and transparent charging
Similar to any other product or service bought by consumers, they rightly want to know what it is costing them. The providers of financial advice need to be able to clearly demonstrate the value that they are bringing through their advice, and what this advice costs. The adviser needs to be able to set out clearly how they will make a difference to the financial future of the client, and charge accordingly for this. Consumers can choose to pay for this through commission taken by the adviser from products, or by separate fees – however the adviser needs to be able to communicate clearly the value that will be gained from their advice.

Financial advice is about lifetime relationships
This might sound like a lofty statement, but it is so true! Financial advice is not a point in time transaction, it is a journey. It starts with the adviser identifying the desired financial outcomes of a client (the destination) and understanding the client’s current circumstances (the starting point). The adviser then puts in place the financial solutions (the vehicle) to help you achieve your objectives.

But as with any journey, the minute that you set off, everything changes! Financial markets change, your circumstances change, maybe your objectives change. So your financial adviser needs to travel on your financial journey with you.

Unlike in your bank branch, your Financial Broker will be a consistent figure throughout this journey. Continuing to guide you and redirect you as needed.

Financial advice was never more valuable. Can you afford not to get it from a Financial Broker?

In your 30’s? Here’s some financial advice!

Living through your 30’s can be a challenging time financially. It’s often the time when “big moves” happen in life: marriage, having kids, buying a home, career development etc. It’s a time to be enjoyed, and it’s also a time to be careful financially! You don’t want to spend your 40’s and 50’s trying to make up for a lost decade… Here are a few ideas to help you avoid that very situation happening.

Live off your income only
Living an appropriate lifestyle is crucial to financial stability. Once you start living beyond your means, credit card bills start racking up and you’re on a downward spiral. And when this spiral starts, it’s very hard to break out of it. The solution is to match your lifestyle to your income. If that means less nights out or luxury purchases, well that’s the way it has to be!

Don’t blow your bonuses!
While not suggesting for one minute that you should live a miserable existence with no luxuries whatsoever in your 30’s, bonuses are not an opportunity to just fritter away cash! Yes you and your family deserve treats, and bonuses might play a role in these.  However getting a bonus is also an opportunity to put a few euros away for a rainy day, whether that’s a war chest from which you’ll educate your children or indeed providing a boost to your retirement planning. Money saved now will make a huge difference in the future, as the impact of time and compound interest will turbo-charge your retirement fund.

Know your spending
Financial Brokers observe that one of the main challenges faced by clients in their 30’s is actually knowing where their money is going. Having a family budget is a critical element of personal financial planning.  To do this effectively, you need to actually track every cent spent over a period of one to two months. You’ll be amazed where money is being spent that you’re hardly even aware of. Is there an alternative to buying all those coffees every day? Can you cut down on taxi journeys and use public transport? Could your family shopping methods change, to feed the family in a more cost effective (and possibly healthier) way?

Focus on your career
Your 30’s are the time when significant career moves can happen. Are there opportunities for you to bring your career to the next level by undertaking further study or indeed by putting your hand up for more work? After all, your career is the driver of your income and increasing your income makes a lot of these challenges much easier to face. 

Debt is the enemy of savings
Of course you need a mortgage if you want to buy a house. But make sure you can afford your repayments. And keep that credit card in check! Servicing debt is a killer when trying to save money so beware of taking on debt that you cannot afford.

Above all, enjoy your 30’s! They are halcyon years, a time of great fun and opportunity. Live your life and set yourself up well for your later years too.