Life Assurance Protection Guidance & Advice:
Moneywise offers a comprehensive service in relation to life assurance protection contracts. With a vast array of products and types of protection available it can be confusing to determine which type of protection is best suited to one’s needs. Moneywise acts as a guide providing advice and sources the best rates available on the market.
Life Assurance Protection:
Permanent Health Insurance (PHI):
Otherwise known as Income Protection. PHI covers the policy holder unable to work long term due to due to an illness or an injury. PHI provides a monthly taxable income payable after a deferred period, usually 13 or 26 weeks (the period during which an employer may continue to pay a sick employee).
The benefit paid cannot be more than 75% of your net earnings including any state benefit paid to you while out of work. The maximum age to which you may have the cover in place is 65.
Every income earner should have some form of PHI cover. The state benefit is minimal should you fall ill or seriously injure yourself in an accident and is certainly it is not enough to maintain a reasonably normal lifestyle. However, those particularly at risk are the self-employed and shareholding directors as they are not covered by PRSI for illness or disability benefit.
Life cover comes in many different forms all aiming to achieve a similar goal in different ways; that is to protect your dependants in the event of your death. The required level of cover depends on each individual’s circumstances. Moneywise Financial Planning Ltd. is Regulated By The Central Bank of Ireland.
This is a standard life cover policy covering the life of the policy holder(s) for a specified term. There are several versions of this such as level, where the premium and cover remains level throughout; indexed where the premium and the cover rises by say, 5% to keep in line with inflation; convertible allows you to convert the policy at the end of the term at prevailing rates, without the need for further medical underwriting.
Personal/Executive Pension Term Assurance:
Here the self-employed and company directors can cover their lives in a tax efficient manner by providing life cover paid for through a pension scheme receiving full tax relief on the premiums.
Otherwise known as decreasing term assurance. Here the premiums tend to be cheaper than ordinary term assurance because the level of cover reduces in line with your outstanding mortgage as you pay it off. Mortgage lenders in Ireland must by law insist upon a mortgage protection policy to be in place for the length of the mortgage (apart from a few exceptional circumstances).
Partnership Insurance / Keyman Cover:
Keyman Cover is life cover taken out by a company to cover the life of a key member of staff, without whom the company would struggle. A person upon whom the company relies heavily for the income stream and the day-to-day running of the company. Here the company pays for and is the benefactor of the policy.
Partnership cover is different from Keyman in that each partner in a business takes out life cover on each other’s life. The proceeds of the policy should one of the partners die is used to buy out the shareholding of the deceased’s spouse.