A life insurance policy was originally formulated to provide financial support to the family of the policyholders in the event of their death. In return for the guaranteed financial support, policyholders pay a premium on an annual or monthly basis. Although the basic purpose of the policy remains the same, some insurers have modified the coverage over the few decades to include a:
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Saving element (investment element that continues to accrue over the investment term)
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Critical illness option (the insured can receive a payout in the event of critical illness)
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Mortgage protection (repays the outstanding balance of your mortgage if you become seriously ill or die)
Life Insurance Ireland: How much cover is needed?
The purpose of taking a life insurance cover is to provide financial security to your dependants. Hence, the recommended term for a life insurance policy is 20 to 25 years. Alternatively, you can calculate the term based on the time required by your dependants to complete their education and become financially independent.
While deciding on the amount of cover needed by you, keep in mind:
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Overall value of your outstanding loans
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Value of your mortgage
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Income
Usually, the cover amount is the annual income multiplied by the number of years you think your family will need support.
Life Insurance Ireland: Leading Insurers
Some of the leading life insurance providers in Ireland are:
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Ark Life
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Tesco
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New Ireland
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Irish Life
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Eagle Star
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Caledonian Life
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Canada Life
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Friends First
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Hibernian
Life Insurance Ireland: Tax Relief for the Self-Employed
According to the Finance Act 2001 in Ireland, self-employed people can claim tax relief on the total life and pensions cover, depending on age.
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Age
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% of Earnings
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Under 30
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15
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30-39
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20
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40-49
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25
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50 and over
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30
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Life Insurance Ireland: Tips
Some of the tips for buying a life insurance policy are:
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Shop around and compare policies on a like-for-like basis.
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Be completely truthful while filling in your proposal form.
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Read the fine print before signing.
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Remember that there is a cooling off period during which you have the right to cancel your policy.
You must also review your life insurance at regular intervals, specifically during turning points in your life.