Nobody likes to think about the need for life insurance – it’s a gloomy subject at the best of times. However, there has arguably never been a better time to sign up for a policy if you live in Ireland, so perhaps it’s worth considering the future.
Price wars have broken out among life insurance companies trying to tempt customers to switch with offers such as free TVs.
Life insurance is compulsory with Irish mortgages and can add significant burdens to household outgoings every month. However, the market is heating up for this essential service with numerous insurers offering incentives to switch providers as the mortgage market stagnates with mortgage protection policies having fallen by as much as 25 per cent over the last two years.
For example, Zurich Life has cut some of its life insurance premiums by as much as 10 per cent; while First Credit Assurance is offering to pay the next €250 in gas or electricity bills for householders that sign up for its policy; or even a free TV to the first 1,000 customers who make the switch. Meanwhile, SmartQuotes.ie is willing to offer cover free to new parents for a year, for a maximum cover level of €50,000.
However, while these incentives certainly offer appeal, how can you be sure that you’re getting the right deal and not just being tempted by a cool offer?
Right cover, right price
To find the right level of cover at the right price, then consider what type of policy you need. For example, there is: “term assurance”, which offers a payout if you die within a fixed term; “level term assurance”, which is a non-variable payment; “mortgage term assurance” where the payout you would receive decreases in line with your remaining mortgage payments; and “whole of life insurance”, which is an open ended investment based policy that is mainly used with inheritance tax.
Bear in mind that higher payouts cost more – ideally you should set up the policy to cover your outstanding debts. You will also receive a cheaper policy if it is deemed there is less risk you will die – this means that joining a gym, quitting smoking and taking other life-improving measures could bring your premiums down.
Whether or not life insurance is worth having is really dependent on you as an individual. For example, if you’re single with no dependents then you are better off focusing on your own finances.
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