Life Insurance Cover
askpaul explains about Life Insurance Cover:
I’m going to have a quick run-through with you about Life Insurance Cover. It’s not the prettiest thing in the world to be talking about, I suppose, but, I think there are a couple of really basic things that everybody needs to know about. One of those things is a requirement for Life Cover and how much Life Cover you should have.
So, let’s take the situation of a married couple that has a mortgage. Now, before I get into this example it’s very important to understand that everyone’s circumstances will be different. So, it does depend on your circumstances. But, if you were married and you have a mortgage and something was to happen to Mam or Dad, and they happen to die a little bit early, what happens? Number one is that the surviving spouse will get the widow’s pension and with two dependents, that’s about €1,150 per month.
Also, they should have Mortgage Protection in place, which means the mortgage is paid off. So, the surviving spouse will have an extra €1,150 coming in, and they’ll also have the mortgage cleared. So, not a doomsday scenario. Life Cover is only needed in this case to up the financing a little bit, to give a buffer. So again, just really concerned that people may have too much Life Cover and are paying too much for coverage they may not need.
If it’s a situation where you’re renting and you’re cohabitating, which means you’re living together, but you’re not married, it’s a different circumstance. Because you won’t have a Mortgage Protection policy, which means if you die, your spouse or your partner in this case is going to have to continue to pay rent. Also, they won’t get the widow’s pension, because you’re not married. So, they have no financial support from the state. They will need a hell of a lot more Life Cover than somebody married.
When it comes to Life Cover, if you take, statistically speaking, a 35-year-old couple. So, Mam and Dad are 35 years of age. If you take them and look at the figures … I’m going to show something on-screen now, which is a calculation of the likelihood of something happening. I’m going to show you what you need to be doing. This is clever. So, I use this site from Friends First, and this site from Friends First is a calculator of the probability of risk. Okay?
It is a bit complicated by the sounds of it, but we’re going to put Paul and Sarah in here because Sarah’s my wife. We’re both 35 years of age and we are non-smokers. When you see we hit the “Calculate risk,” look what happens. We’ve only got a 7% chance of dying before we get to age 65. But, unbelievably enough, we have a 78% chance of being unable to work for more than one month, and we’ve also got a 24% chance of serious illness. So, what does that mean? Well, all in all, we have an 85% chance of something going wrong with Mam or Dad in this situation. So, you do need some level of cover.
Now, what does that mean to you reading this? You need some level of cover. Please contact askpaul and we can have a chat through Life Cover, Specified Illness Cover and Income Protection. There are more videos and content on the askpaul website in relation to these three things – Life Cover, Specified Illness Cover and Income Protection. But, it’s just important that you will need some level of cover. It’s making sure your hard-earned cash goes to cover the correct things for you and your personal circumstances.
So, please don’t hesitate to get in contact with us today, and we can have a chat through what cover we think you may need.
Why work with us?Work with Ireland’s leading financial advisors to make your money work smarter, harder and go further.
Join over 90,000 people who follow askpaul
Get FREE access to content to help you make the right decision about your finances. Follow askpaul on: