Life company regular saver vs ETF

mrbrian

Registered User
Messages
22
Hi All,

Have spent a good bit of time looking into various financial products trying to get a better understanding of what my options are and how I should approach this. Lets be honest the market is incredibly complicated and there are lots of vested interests. I hope some people here can help.

I am 35, married, one child and debt free.

Pension:
I have recently sign up to a pension and with a 99% allocation rate and 1% annual management fee + 4 euro a month. This sound a little expensive but maybe I am just would like to know.

Q1. Should I have a 100% allocation rate with a pension?

Life cover:
I appreciate I need something to be in place in case I died, I have got many quotes and have lots of varying prices and options. Primarily around age to cover to, indexation, convertible and guaranteed.

Q2. Is to 65 sufficient b) should i lock in a price now c) should I index this or just go for a higher premium now?

Income Protection:
Found this pretty expensive in general but understand its also necessary. I am eligible for disability e.g. not self employed. Basically I am unsure whether I should also go guaranteed and or indexable. I have done quotes for 10 years older and the prices are massive - should I also lock in this price?

Regular Saver:
I have recently bought into a bond with NTMA for 10 years. This is my childs secondary school fund. However, I also intend to save circa 2k a month and looking to get the best advice on this. This is the hardest question.

Q3. Should I look at a regular saver from the life company or invest in ETF's? I am relatively smart but by no means capable of buying individual stocks and trying to time the market. it's a buy and hold strategy basically and the ETF's look like the best option out there? maybe I am wrong but the regular saver products from the life company looks loaded with fees and has some nasty exist costs if leaving before 5 years - again I understand they are longer term products and carry risk.

I appreciate thats a lot but would love some help - I am finding independent advice a very difficult thing to come across.

Thanks,

Brian
 
Pension:
I have recently sign up to a pension and with a 99% allocation rate and 1% annual management fee + 4 euro a month. This sound a little expensive but maybe I am just would like to know.

The charges are too high. No need to pay €4 a month for a start. Pay a fee and get 100% allocation and a lower management fee.

Life cover:
I appreciate I need something to be in place in case I died, I have got many quotes and have lots of varying prices and options. Primarily around age to cover to, indexation, convertible and guaranteed.

Q2. Is to 65 sufficient b) should i lock in a price now c) should I index this or just go for a higher premium now?

The role of life cover is to replace lost income. How much income needs to be replaced if you died. Take into account debts paid off, widow's pension paid before arriving at that figure. If you are not working, do you need cover? So if you intend to retire at 65, is there a need for cover thereafter? You can get life cover that is paid as a monthly income amount instead of a lump sum. The monthly income increases each year in line with inflation but the term it is paid out for decreases.

If going for a lump sum, when do you need most cover? Now or when you are 65, about to retire with a big pension pot and the kids have left home?

Income Protection:
Found this pretty expensive in general but understand its also necessary. I am eligible for disability e.g. not self employed. Basically I am unsure whether I should also go guaranteed and or indexable. I have done quotes for 10 years older and the prices are massive - should I also lock in this price?

All your plans in life are based on you being able to earn an income. If you can't, you get €9,774 from the State. Could you pay your bills if that was your income? For me, income protection is the starting point of the financial planning process. It can be expensive, but look at what the alternative is.

You do get tax relief on the premiums.

Regular Saver:
I have recently bought into a bond with NTMA for 10 years. This is my childs secondary school fund. However, I also intend to save circa 2k a month and looking to get the best advice on this. This is the hardest question.

The products in the regular saver market is shocking. Zurich have a good product, that's it really. For €2,000 a month, you would be able to get access to some of the cheaper, non insurance providers with no early exit penalties, 1% government tax or 8 year tax.


Steven
www.bluewaterfp.ie
 
Thanks for the advice. I was thinking of saving 1k a month in 5-10 year horizon and another with instant or close range access. The view is to deal with lump sums as they build up.

You mentioned Zurich - what product and why is it any good?


non insurance providers with no early exit penalties, 1% government tax or 8 year tax - what ones do you refer to?

Thank
 
Thanks Steven. Are there any other options out there you might recommend e.g. Davy select?
 
I don't use Davy Select, I prefer to you Conexim.

As I said, the options for savings plans from the insurance companies are very poor but with the size of your monthly contribution, you have more options. Or else, save it in a cash account and invest larger lump sums.

Steven
www.bluewaterfp.ie
 
For anyone considering Zurich for insurance they are good. If you are considering their Vista savings scheme, avoid it like the plague. They have left a trail of destruction for expats myself included with hidden fees and are being sold by vermin who do not understand the product and are solely after commission.
 
Vista savings scheme

That it an ex pat plan and not available in Ireland.

It seems that the ex pats get really hammered from all angles. The product provider really goes to town on the charging structures, in some cases tying you in to long term commitments or else you'll lose your money in charges. Then the advisors who sell them to you maximise their commission on all cases. I presume there are only there for a few years and are not building a business, so they try to earn as much as they can before heading back home.


Steven
www.bluewaterfp.ie
 
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