Life Do we even need life insurance?

microsquid

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Hello AAMers,
I did a search for this as I couldn't believe it hadn't been asked before, but it appears not on AAM (all these other financial websites, but I have somewhat less faith in them).
Synopsis: We have been extraordinarily fortunate via a tracker mortgage to pay our house off early. I had previously organised Mortgage Protection Insurance on the reducing balance from Irish Life via Tesco, and this policy will continue to run for another 8 years. I'm thinking of cancelling it as with the reducing balance it will pay out less and less anyway. It's a sole life policy as I would be the larger loaf earner.
We have 2 children, one only 9 months old.
Both DH and I have Death-in-service benefit from our employers to the tune of three years salary each. We are both non-smokers and under 40, with no other loans (extremely fortunate indeed).
We are not public-sector and will likely not stay with our employers forever (I've been there 12yrs, DH 6, both quite happy to stay for a long while more but nothing lasts forever.) Should we get cheaper life cover now before we turn 40 or is it a mugs game as it seems pay-outs get ever harder to get and more conditions are excluded?
We also both have health insurance paid for by our employers.
I am extremely unlikely to get Serious Illness cover as I had cancer as a child (fortunately completely cured and no return) so is it worth getting anything else?

I was at a Baby Fair and spoke briefly to an Unison adviser and he was taking about Life insurance for the kids to cover funeral costs - do people in Ireland get this cover?? He was also talking about the benefits of them being able to flip it on maturity and maintain cheap cover, again I'm not sure if this is sales talk.

Apologies if this rambles about a bit - ask questions if I've been unclear.
 
When assessing whether you need life cover, ask yourself, what would the financial consequences be if you died. What kind of life would your family have? Life cover is about replacing lost income, so you have to assess what your income is spent on and how will it be replaced?

Your wife would receive the widow's pension and with 2 kids, would get about €1,000 a month, that would pay for the child care for your 9 month old.

What else does your income pay for? There is no mortgage to pay for, so in the case of death, we can't even knock that off monthly outgoings.


is it a mugs game as it seems pay-outs get ever harder to get

If you don't lie on your proposal form and you are actually dead, why wouldn't they pay out?

Remember, anyone can be in an accident at any time.

The other risk benefit to look at is income protection. If you cannot work, you get €188 a week from the State. Is that enough to maintain your lifestyle? If not, do you have savings to live on if you are out of work for 3-5 years? Or do you insure the risk?

he was taking about Life insurance for the kids to cover funeral costs - do people in Ireland get this cover?? He was also talking about the benefits of them being able to flip it on maturity and maintain cheap cover, again I'm not sure if this is sales talk.

Most people incorporate the cost of a funeral into the life cover that they take out. You still get people taking out cover for €20,000 to cover the funeral but it is rare that I see people taking out such small amounts.

Not sure what he was talking about in flipping it. There are some unit linked plans that have a cash in value. This plans are relatively cheap at the outset but as you get older and the chances of you dying increases, the cost of cover increases and eats into the savings element you have. For most plans the premiums double or triple just to maintain the same level of cover. In the long run, they are not good value. Better getting cover that has no cash in value but the premiums aren't reviewed.


Steven
www.bluewaterfp.ie
 
I thought OP meant cover for funeral costs in case God forbid one of the children died and they could continue on the policy when adults, never heard of it if that is what he meant.
 
I thought OP meant cover for funeral costs in case God forbid one of the children died and they could continue on the policy when adults, never heard of it if that is what he meant.

That's what I thought initially too. It depends on how you read the sentence. Most life cover plans provide cover for children's death of about €4,000. I have never come across anybody looking for life cover on their kids life. It doesn't bare thinking about.


Steven
www.bluewaterfp.ie
 
We have 2 children, one only 9 months old.

Both DH and I have Death-in-service benefit from our employers to the tune of three years salary each.

We are not public-sector and will likely not stay with our employers forever

Should we get cheaper life cover now before we turn 40 or is it a mugs game as it seems pay-outs get ever harder to get and more conditions are excluded?

There is no harm in having extra insurance. Particularly if it is relatively cheap and affordable. Normally the earlier you start the cheaper it is.

What is your premium and cover.

How much would new cover cost you.

Because you may leave your employer or cease employment for whatever reason, it's a good idea to keep your cover as you would then be without the death in service benefit.

I don't get your last sentence above, but another poster has covered this.
 
Sorry for delay, I needed to do some sums!
My slightly more focused questions are: how many years salary would typically be insured for each partner? An American website was saying 20, which sounds excessive.
Accidental death cover sounds like the way forward but in the past agents have bundled this with serious illness cover and when the form goes to the actuaries they say no and kick it back. I wouldn't even mind if they said 'no cover for cancer' but I'm not covered for stroke or heart attack either which would be more common.
The comments on insurance companies not paying out were from anecdotes on condition exclusions, and the famous one recently about the young fella in the US who didn't get a leukemia pay-out because he had a pre-existing condition... acne. (OT, sorry) I'm hoping Irish companies are more honest but with more US firms entering market I'm nervous.
Has anyone heard anything about Union Heritage?
I also would welcome advice from people on whether they went for term or whole of life cover. Life insurance is something you can pay as much as you like for but I'm just looking for the Ford Focus policy, not the Merc. Reliable, comfortable and safe, but no Lotto win.
The kids policy was a funeral cost policy with the option for them to maintain Life Cover and even extend it to 3x(?) without a medical at the age of 18.
Current policy is as cheap as chips €9 a month, think cover is now about 60k
 
I was at a Baby Fair and spoke briefly to an Unison adviser and he was taking about Life insurance for the kids to cover funeral costs

Any advisor who is prepared to stoop as low as this for a sale has the moral compass of a gerbil and shouldn't be let loose on the public.
 
Child life cover is normally a free benefit on a life assurance policy or sometimes on an accident policy such as the ones schools encourage.

Claims on child life cover are the most heart breaking claim anyone will deal with.
 
Wev no life insurance as own our home n savings...however recently had a quote 16euro a month for 50k pay out each....have kids on the 9euro school insurance.
 
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