Life insurance
Irish Life Assurance plc
6 questions everyone has about life insurance
March 24th, 2021
• 4 min read
Written by Irish Life Assurance
Life insurance is a big, big deal.
Thinking about life insurance and why you might need it is scary, we get it… but don’t ignore the niggling voice in the back of your mind.
You’ll feel a lot better if you face this tough subject head on, knowing that you’re doing everything you can to take care of your loved ones in the event of your death.
When it comes to life insurance, people ask Google a lot of questions.
While doing your own initial research is great, this is a subject that requires specific guidance. Here are some of the most popular internet queries when it comes to life insurance (AlsoAsked.com, 18/3/20).
1. What is the difference between term and whole life insurance?
Term applies to a fixed term which means a specified period of time, whereas whole life insurance is for your entire life and continues until you die. Both insurance types provide financial protection for your loved ones, but the conditions are different.
2. What is not covered by life insurance?
The situations and events covered by your life insurance depend on what type of plan you opt for. Before you apply, discuss your situation in detail with your financial advisor to ensure that you get the most suitable plan for your needs.
Most insurance plans are subject to medical underwriting whereby you may undergo a medical assessment in order to be accepted for cover. This also helps determine the cost and the premium of your insurance.
As every individual situation is different, creating a bespoke plan is the best solution and is where a financial advisor comes in.
There are several types of cover available, including benefits like specified illness cover, which would pay a lump sum if you’re diagnosed with one of the illnesses covered by the plan. There’s also income protection, which covers you if you’re unable to work because of an injury or illness while employed. Depending on the type of the plan you have, you may be covered for several benefits under the same plan.
3. What should I look for when buying life insurance?
Always speak to a financial advisor as they are best placed to advise the right cover for you. They will assess your situation and advise you on a way forward. They take everything into consideration, including your dependants, your salary, financial burdens, short-term debts, risks, and with years of experience in the industry, they know everything there is to know about life insurance.
A vital piece of advice is to remember that ‘no one size fits all’ when it comes to life insurance and everyone has a different situation which impacts their decision when taking out a policy. It’s important to think about the bigger picture when deciding on what form of life insurance suits you best, and this is exactly why engagement with a financial advisor should be your first step.
The cost of life insurance is a major consideration for many people and will determine what plan they opt for. Cost depends on different factors including your age, your health, if you smoke, the type of insurance product you choose and the level of cover you need.
4. Can I cancel life insurance at any time?
Yes, it’s just a matter of getting in touch with your insurance provider and explaining that you’ve changed your mind.
If you change your mind, you get a full refund of any premiums paid if cancellation happens within the first 30 days of the policy being issued. This is known as the ‘cooling-off period’.
It’s possible to cancel your life insurance at any time but you are only entitled to a refund of the premiums paid if this happens within the cooling-off period.
5. What is basic life insurance?
Mortgage protection, for example, is often viewed as the most basic form of life insurance as it ensures your mortgage, the biggest financial commitment for most people, is paid if you die. However, it only relates to your mortgage and that may not be enough for you.
The type of life insurance you need depends on what stage of life you’re at. If you have a partner, you may need to consider their needs. If you have children, you want to provide stability for them. If you have significant financial burdens, you‘ll consider measures to ensure they are paid off so that your family doesn’t have to take them on in the event of your death. Some people have short-term debt and want to put some form of protection in place. These are the types of things to consider when choosing a life insurance plan and while it might seem daunting, a financial advisor can assess your situation and advise you on what steps you should take. They will help you decide on the most suitable plan for you.
6. How long should life insurance last?
Discuss this with your loved ones – it’s important that you sit down and really consider what is adequate for you and them. The length of your plan will depend on a lot of factors, and a conversation with your partner and/or family could help.
We often put this chat on the back burner as it’s a difficult subject to tackle, no one wants to think about losing someone they love. However, remember this is ultimately about protecting those close to you and life insurance can play a major part.
If you want to learn more about life insurance and why it’s something to consider, set up an appointment with an authorised financial advisor. This is your opportunity to get professional advice and discuss all the different types of life insurance, so you can decide on the best plan for you and your loved ones. Or, learn more about our Life Insurance products.
Get a free financial review online now to take the first steps towards getting the right life insurance policy in place.
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