A rainy day is not too bad once you have planned for it. Our financial advisors specialise in a range of insurance policies that mitigate the financial damage caused by the unexpected.
Life assurance is a simple product designed to provide a lump sum or monthly income payment on death. It is designed to provide your dependants with financial security on your death and ensure that they are not left with a shortfall in income. It can also be used to protect mortgage and loans to ensure they are not passed on to your estate.
- When did you last review your life insurance?
- Are you paying too much for your existing life insurance policies?
- How would your spouse/partner/dependants cope if you were to die tomorrow/next week/ next month? – have you cover in place?
- Have you any loans that are not covered by a life policy?
- Is your business sufficiently covered for loans/ death of a business partner/ loss of a key employee?
What are the benefits of Life Assurance?
Your dependants will not be left with debts or struggle financially as a result of your death. It’s true that not everyone needs life assurance, however, if someone – your wife, your child – would be adversely affected by the loss of your income should you die, then you really should have some cover in place.
What type of life cover do I need?
There are many different types of life cover and we can advise you on which is best to suit your needs.
New Family Income Benefit:
This is a frequently ignored form of life assurance, even though it offers appropriate cover for many people, and is cheaper than traditional forms of term assurance. A family income benefit policy will pay a monthly income to your loved ones, rather than a lump sum. This is a big selling point, as you may not want to leave your loved ones having to make complex investment decisions with the lump sum they would get from other policies upon your death.
Serious Illness Cover
Serious Illness/Critical Illness Insurance pays out a tax-free lump sum if you are diagnosed with one of the specific illnesses or disabilities that your policy covers. It can be provided as an extra benefit on a Life Assurance or Mortgage protection policy or it can be provided as a standalone product. Typically, a policy will cover Cancer, Heart Attack, MS, Stroke, Parkinson’s, Alzheimer’s etc. However, each Life Company has a different product offerings and it is important to review them to ensure you have the best one, at the best price.
You may want to consider serious illness insurance if:
- You have either no or insufficient health cover.
- You are not in paid employment, so cannot buy income protection insurance.
- You have a mortgage, personal loans or other debts that you would still have to pay even if you became seriously ill and possibly unable to earn an income.
You can claim the benefit on your policy only if:
- The illness you develop is one of the specific illnesses your policy covers.
- A medical diagnosis confirms that your illness matches the definition of that illness outlined in your policy terms and conditions.
- You survive for a period after you are diagnosed. This period may be seven or fourteen days, depending on the policy.
- You must meet all three conditions above to claim your policy benefit.
Whole Life Policy
Some insurers offer life policies that insure you for the whole of your life, or for as long as you want to keep paying premiums. The premium on these policies is much higher than with basic term insurance and can increase at regular intervals.
The most common type of whole of life policy is a unit-linked whole-of-life policy. With this type of policy, the life assurance company invests your premium in a fund. They then manage the fund so that it is expected to grow at a certain rate and to increase in value over time. The fund value is not guaranteed. It may grow by enough to pay for any increase your life insurance premium throughout your life. Or, in some cases, it may fall short of the amount that is needed to pay for your life insurance. In that case, you may have to pay a higher premium to keep the sum assured at the agreed level.
You can decide to pay premiums up to your death or for a specified time, for instance until you are 65. In most cases your insurer will review your premiums and increase them every so often. Your premiums could increase significantly following this review and you may not be able to afford it. If this happens, you may have to accept a reduction in policy benefits. It’s important to consider this before you decide on this type of policy.
Inheritance Tax Planning
Inheritance Tax Planning identifies and manages any tax liability in advance and will deliver peace of mind for both you and your family. You can set up a life insurance policy equal to the estimated value of your Inheritance Tax liability and policy proceeds are designed & agreed with Revenue so that they can be used to repay any Inheritance Tax liability due. This ensures that the full estate is passed on to recipients without any additional taxes due by them. It helps address the following two questions:
- How will your family manage this liability after your death?
- Have you made provision for Inheritance Tax?
Keyman insurance is one of the most overlooked and most important insurances in business – it insures some of your biggest business risks. You might have public liability insurance and you insure your buildings, stock and vehicles, professional indemnity insurance and legal cost insurance.
What about your other Primary Assets – Your key staff?
Whilst these are all very sensible precautions, we can sometimes neglect to protect our most valuable business assets: the men and women whose talent, experience and judgement contribute substantially to the financial health of the organisation. These key staff represent the heart of every businesses especially small or family run businesses. Prolonged absence through serious illness or even death can result in big losses or even closure.
Keyman Insurance is a must. It can’t replace people, but it can provide cash to buy time and cover the costs of temporary staff, recruitment or loss of profits.
Who are your key people?
A key person is anyone who the company depends on for its continued success, relies on their specialised skills, reputation and contacts and whose death would have serious consequences for your company.
This insurance falls into the following four categories:
- Insurance to help your business continue during the period when your key personnel are unable to work, or to train or recruit a replacement.
- Insurance to protect profits.
- Insurance to protect shareholders or partnership interests.
- Insurance for anyone guaranteeing a business loan.
Keyman Insurance to protect your business:
Many businesses will not have employees with the same knowledge, experience, judgement and reputation as the deceased employee. Sourcing an external candidate and, in particular, the recruitment and training process can be slow and expensive.
Keyman Insurance to protect your profits:
The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they’re central to your businesses, their loss will knock on to the bottom line. You can insure for loss of profits too!
Keyman Insurance to protect shareholders or partners
Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not want those stakes held by newcomers. Keyman insurance schemes can be implemented which provide the necessary finance to buy the shares from the original shareholders or their estate.
Insuring those who provide personal guarantees
When a business takes out a loan or raises finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So, what happens if these guarantors become seriously ill or die? The lenders may well be able to call in the loan. What happens then? Insurance can be put in place to pay-off the loan and free the business and the guarantor’s family
Can your business afford to ignore Directors or Keyman Insurance?
Negative Equity Insurance
Negative equity insurance is simply using a life insurance policy to fund the difference between the value of a property and the outstanding debt on it should you pass on. This is a very prudent estate planning measure; whilst you may be able to manage your affairs on an ongoing basis, would your family be if something happened to you.
Whilst most people have a mortgage protection policy relating to their own home, most do not have any cover on their investment properties. We believe it is a matter of good planning to consider putting cover in place to cover any potential shortfall.
John and Mary bought an investment property in 2014. As it was an investment property, they didn’t have to take out mortgage protection cover. Its value rose very quickly with the rapid increase in house prices and by 2019 they estimated it was worth about €120,000 more than they had paid for it. They viewed it as a valuable financial safety-net for themselves if they ever needed it and something they could pass on to their children in time.
John and Mary have since fallen victim to a housing market collapse. They are now faced with the reality that the mortgage on their investment property is now in negative equity. If they were to sell it today, they would have to find an additional €100,000 to clear the mortgage. If their children were to inherit it, they would now be inheriting a debt instead of an asset.
The solution would be to take out a €100,000 Lump Sum on Death cover. If either of them was to die the lump sum payment combined with the value of the property will help ensure the mortgage is cleared in full. It also means that in the future they won’t be burdening their children with debt.
Over 50’s Insurance
We understand that not everyone wants to go through the details of their medical history to take out a protection plan – we know that some people find this awkward. If you are aged between 50 and 80 and apply for 50+ Easy Life Cover, you will not be asked for any medical details or health history and we will not ask you to go for a medical.
We guarantee to accept you for 50+ Easy Life Cover no matter what your medical history. However, you are only covered for ‘accidental death’ during the first two years. Please see below for a full definition of ‘accidental death’. Some exclusions apply.
What is accidental death?
For this plan, ‘accidental death’ means ‘death caused only and directly as a result of an accident caused by something violent, which can be seen and which is not linked to any other cause’.
- If you die because of an accident during the first two years, we will pay the life cover benefit shown in your schedule. (Some exclusions apply around the nature of the accidental death, for example we will not pay a claim for suicide.
- If you die during the first two years of your 50+ Easy Life Cover for any reason other than an accident as described above, we will only pay your estate a full refund of regular payments you have made. After year two of your 50+ Easy Life Cover you are fully covered for life cover as shown in your schedule.
How much does it cost?
50+ Easy Life Cover starts from just €15 a month making it affordable. The costs of your regular payments depend on your age, whether you’re male or female and the amount of cover you choose. The plan can give your loved ones a guaranteed lump sum to help pay some of the costs they may face after your death, for example any funeral expenses or bills left to pay.
Or, you could use the plan as an affordable way to leave your grandchildren their own little nest egg. To do this you should leave instructions in your will, showing who should receive the lump sum. Your 50+ Easy Life Cover plan starts when we receive your first payment. However, payment of the full cover only made in the first two years if you die as a result of an accident.
Pension Life Cover
Pension Life Cover is a life cover plan that you can take out before you retire. You do not have to have a pension to take out this cover. It pays your family a guaranteed lump sum if you die during the term of the plan.
They can use this as they want, to pay bills, loans – whatever matters most. It gives you peace of mind in knowing that if you die during the term of your plan, your family could be protected financially. Phoenix Financial Services will help you decide how much cover you need. The advantage of Pension Life Cover over other life cover plans is that it could cost you less. This is because, if you are eligible, you can claim income tax relief on your payments.