What is Life Cover?
A business or individual enters into a contract with a life company whereby they pay a monthly premium in exchange for a specified level cover for the life/lives insured during the policy term. This tends to be to provide financial protection (in the event of death) for dependents and debt.
Business Life Cover
Similar to personal life cover, business life cover is used to cover debt but also to cover senior or “key” individuals in a business whose capabilities are not readily replaceable in an organisation.
Business Life Cover can also provide cover for partners or directors in a company. This would provide a lump sum payment to the company to enable it to buy the company from the estate of the deceased partner or director.
Personal Life Cover
Mortgage Protection is part of mortgage contracts to provide financial protection for mortgage debt in the event of death of the one of the mortgage holders. This cover typically reduces in line with the mortgage each year until it is paid off.
Life cover can also be used to provide financial protection against other debts (car loans, personal loans etc) and for dependents (children). The level of cover you need is dependent on your age, income, debts, other cover you have in place and how many children you have.
Life cover can have many other important benefits such as hospital cash payment, accident cash payment and surgery cash payment.
How much does life cover cost?
It’s a difficult question as it literally varies from person to person. How much it costs depends on how much you need. This depends on your income, debts, dependents (eg kids), age and health. For lots of people, the cost or level of cover comes down to what their budget will allow, as there are many other things that need to be paid for!
The cost for life cover is transparent in terms of being able to obtain quotes to ensure you are getting a competitive cost. Our policy is to show clients all quotes on the market to give them peace of mind that they are getting good value for money.
The easiest way to demonstrate the necessity of Life Cover is to put a case study together:
A married couple – John and Susan, with two children, earn €40,000 per annum each. This means a net pay of €2,850 each. Their monthly bills are as follows:
- Mortgage payment – €1,400
- Creche Payment – €1,600
- Personal/car loan – €400
- Shopping – €1,000
- Utilities – €300
- Sundries (coffees, family trips etc) – €200
John passes suddenly, and his income is no longer available to pay household bills. If they have mortgage protection in place so the €1,400 per month has been cleared. But this leaves Susan with other bills (€1,600 + €400 + €750 (€1,000 shopping for 3 people instead of 4) + €300 + €200) of €3,250 and an income of €2,850.
Number of Irish Adults who do not have Mortgage Protection for their mortgage debt