How Much Life Insurance Do I Need?

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We will help you work out a reasonable level of cover. We need to balance affordability and cover to find a reasonable compromise.

How much life insurance and mortgage protection do you need?

Mortgage Protection

A mortgage protection insurance policy is required by lenders for most mortgages. The amount of cover under the policy starts, as you would expect, at the exact same amount of the actual mortgage. So if you are taking out a mortgage for €200,000 over 20 years, the mortgage protection isurance policy will also be set at a figure of €200,000 over 20 years. The unusual feature in a mortgage protection policy is that the insured amount decreases over time as teh balance on teh mortgage decreases, because the policy is only designed to repay the mortgage in the event of death.

If a person runs into difficulty in paying their mortgage, one of the mmatters that needs to be addressed is the growing difference between a loan balance which is not reducing as it should because of the arrears and the mortgage protection which is provided by an independent insurer but where the level of insurance is falling in line with the planned repayment schedule.

For this reason a shortfall in cover will occur and alender may seek additional cover assecurity for their loan.

 

Life Insurance

When others are relying on your income for their livelihood, serious thought must be given to what will happen to them if you pass away.

It may be your partner or your children or perhaps your parents as they get older.Each will have different needs and for varying time frames.

This is where life insurance kicks in and if you arrange cover early enough, it can be surprisingly inexpensive when compared to the benefits.

A male aged 30 in good health .can take out a 35 year €500,000 term life insurance policy for around €40 per month.

Areas to be considered when estimating your life insurance requirement are:

What are the financial needs of the people who rely on you and for how will income be required.

  • How much income will a surviving spouse require and for how long? Build in inflation into all your calculations
  • What are the costs of rearing children to an age when they will be self sufficient?
  • Wat are the potentail education costs
  • Do you other dependants, perhaps an elderly relative that relies on your time and some level of money? How much will these surviving relatives need if yu are gone.

 

Liabilities and Debts

  • Car loan
  • Credit card
  • House mortgage
  • Investment property mortgage ( very often not covered by a mortgage protection policy)
  • Taxation liabilities

Final Expenses

  • Funeral and associated arrangements

Providing for your partner and children

  • Lump sum required to generate an investment income for your family
  • Funds for children's education
  • Funds to maintain existing standard of living

Business concerns

  • Funds to allow business buy out your interests
  • Funds to cover potential business personal guarantees

Inheritance Taxation

  • Depending on your assets inheritance may be payable.

These are important matters and it really does make sense to sit down with an expert and arrange adequate protection..

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