There are many types of insurance available, and if you are just starting to get organised and are considering different types of policy, you may be finding it to be an intimidating minefield! Which types of insurance do you really need, and how do they all work? If you decide you do need cover, which type of policy should you opt for? Life insurance can feel like a difficult subject – no-one likes to think about what happens in the event of their death. But in many ways, life insurance is one of the most vital types of cover. If you have financial dependents, it’s an essential way to make sure they will be looked after should anything happen to you.
At Oaktree Financial we can help you find the best possible policy for you and your family, ensuring they will be well cared for and giving you peace of mind. Here is our comprehensive guide to life insurance cover in Ireland today.
What is life insurance?
How life insurance works
From the insurance company’s perspective, they want you to live a long time, so that they don’t have to pay out on your policy, and they keep receiving your premium. Anything that effects your health negatively will also have an effect on your policy, pushing up the price as it increases the risk of the insurance company having to pay out.
Some insurers are so keen to improve your health that they now offer schemes and incentives to encourage fitness in their customers – from health tracking apps to rewards such as cinema tickets for those who attend the gym! And the real prize, of course, is the lower cost of your premium.
Sometimes the underwriters will feel they need more information before making a decision about your application. This could take the form of a further questionnaire (for mild health issues); a nurse medical / screening (often used for weight issues, blood pressure, and cholesterol readings); a medical report from your GP (for moderate health issues); or a full medical exam (needed to properly assess severe health issues).
Exclusions and exceptions
Special terms can mean you will receive a loading – ie you will have to pay more. It can also mean you will receive an exclusion, meaning you won’t be able to claim on the policy for certain conditions. Often special terms can mean both a loading and exclusions.
Loadings and exclusions are the result of risk appearing to be too high in certain areas – for instance, if your mother developed breast cancer before a certain age, your risk too is higher, and so the insurance company may say you will not be able to claim for breast cancer.
A postponement essentially means they would like you to try and make some changes, and then try again later. This could mean losing some weight, or waiting to see if your new medication works.
If you are declined, it’s usually for medical reasons. The insurer sees you as too high a risk. This can be particularly frustrating because if you have existing health conditions you are more likely to feel you need life insurance. However, life insurance underwriting is not an exact science and you may well be accepted by another insurance company. If you’re in this tricky situation, it’s particular useful to have a financial adviser who will know which insurers may be more sympathetic to your specific situation.
Why is life insurance important
What will life insurance cover?
-Specific mortgage protection insurance, intended to cover the remaining balance of the mortgage if you die or are diagnosed with a serious illness and become unable to work. The illnesses that are covered will likely be specified in the plan. Getting mortgage protection insurance is often a compulsory part of taking out a mortgage.
-Serious illness cover, which is sometimes a standalone policy in its own right, but can also be tagged on to a life insurance policy as an extra benefit.
Accidental death cover, which is specifically for if your death happens by accident rather than by old age or serious illness.
-Income protection, that will pay you a regular income (up to 75% of your annual salary) if you can’t work due to injury or illness.
Terminal illness benefit, which will pay out before your death if you are diagnosed with a life limiting condition and not expected to survive more than a year.
-Specified illness cover, also sometimes known as critical illness cover or serious illness cover – which pays out a lump sum if you are diagnosed with an illness specified in your plan.
-Business protection, which protects against the loss of a valuable member of your business like an employee, director or partner.
Is life insurance taxable?
The world of life insurance can feel intimidating. With so many options to choose from, and with it being a very personal kind of policy, it’s natural to need some help finding the best life insurance plan for you. Our team of friendly experts at Oaktree Financial know exactly how to get you the policy you need at the very best rate. If you are concerned about looking after your family when you are gone, call Oaktree Financial today.