Life Insurance

What is life insurance?

A comprehensive guide to live insurance

  • By Paddy Compare
  • 19 January 2022
  • Updated 21 May 2023

Life insurance is one of the most common forms of insurance in Ireland. Life Insurance is important as it can give you peace of mind that your loved ones will be kept financially secure if the worst should happen.

There are two categories of life insurance covers, one where only one person is insured, and a second, dual cover, where two people are insured under one policy.

There are 3 types of life insurance:

  1. Term life insurance
  2. Whole life insurance
  3. Decreasing Term / Mortgage Protection life insurance

With Paddy Compare, you can make an informed choice by choosing the best life insurance coverage in Ireland, for you!

In this article

What is Life Insurance?

The role of a term life policy is to provide a lump sum of money that helps your family:

  • Cover your debts, including your mortgage.
  • provide an income for your loved ones.
  • Provide a nest egg for your family.
  • Make sure your children have money for their education.
  • Provide money to pay for the funeral and other final expenses.

How does Life Insurance Work?

  • You choose the type of policy, duration of the policy, and the payout amount.
  • You pay the regular premiums to keep the policy active.
  • If you die within the policy term, your beneficiaries must file a claim to receive the payout.
  • If the claim is successful, your loved ones will receive the payment, and the policy will end.

Wondering if you're someone who needs Life Insurance? The answer is a resounding Yes.

Life is unpredictable and if you are going through big life changes like getting married, starting a family, or buying a home, you should ideally consider getting life insurance.

What does Life Insurance Include?

What your cover includes depends on the type of cover you choose.

Life insurance usually covers:

  • Most common causes of death
  • Terminal illnesses

Life insurance usually doesn't cover:

  • Pre-agreed conditions
  • Drug and alcohol abuse
  • Self-harm within the first 12 months.
  • Dangerous activities
  • Critical illness or injury
  • Disabilities or chronic illnesses
  • Undisclosed health issues

There are a number of factors that influence what your life insurance policy covers, and it’s important to be aware of them when buying Life Insurance.

Which Type of Life Insurance is best for you?

Term Life Insurance Whole Of Life Insurance Mortgage Protection Insurance
Life insurance over an agreed term. Life insurance that lasts for a whole lifetime and is not limited to a specific term. Dedicated type of life insurance, which helps secure the ownership of your home.
If you die or become ill during this period, the people you've named as beneficiaries get a cash payout. If you pass away, this policy will provide a lump sum payment to your beneficiaries. Secures your home by paying off the outstanding mortgage if you die or become seriously ill within the specified term.

In addition to the above 3 types of Life Insurance policies, there are a few other Life Insurance Deals that can be considered as Additional Cover namely:

  1. Terminal Illness Coverage
  2. Death-in-Service Life Insurance
  3. Over 50s Life Insurance
  4. Joint Life Insurance

How to choose the right Life Insurance Policy?

Everyone has different needs which is why there are different types of policies for different types of people. So how do you choose?

There are three strategies for buying a policy:

  • Evaluate the amount of insurance needed. Most people are underinsured and need a boost in coverage. The number one question you should ask is how much financial support would your family need after you're gone.
  • Opt for a cash value over a term life policy. Term-life policies provide coverage for a certain period of time, but a cash-value policy will continue for the rest of your life, no matter how long you live. Your typical term life policy covers you for 10, 20, or 30 years.
  • Ask about broader issues, like what life insurance covers disability. Besides death and dependents, you should also consider if you could pay your bills if you were unable to work for a long period of time. With additional expenses, due to your disability and a decrease in income if you cannot work you could fall into an inescapable financial toll.

How much does Life Insurance cost?

The cost of your policy depends on several things such as the amount of coverage you need, how long you want the policy to run for, your age, your health status, and whether you want a single-life cover or dual-life cover.

If you're a smoker you'll also pay far more for your cover than a non-smoker would.

Here’s are some Tips on how you can get cheaper life insurance in Ireland.

How can I get Life Insurance in Ireland?

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