Personal Life Cover Advice Donegal

Typically, it’s important to have Life Cover in place if your death will have a financial impact on others. If you have a family and dependants, your death could be financially devastating to their finances.

The type and amount of Life Cover you choose should be based on your individual circumstances and requirements..

However, if you have no dependants, you may just require minimal cover to pay your outstanding debts and ensure your affairs are left in order.

A life cover pay out can ensure:

• Your mortgage is paid off when you die, and your family is left with a home free from large monthly repayments
• Funeral expenses and any outstanding debts are cleared
• Your dependants can continue to maintain their lifestyle despite the loss of your earnings

What are the different types of life cover?

There are a number of different types of Life Cover policies available.

• Mortgage Protection

The amount of cover reduces over the term in line with the reducing balance of your mortgage
The term is generally the same as your mortgage
Pays off the outstanding balance on your mortgage in the event you die prematurely

• Term Assurance

Provides a lump sum in the event of your death during the term of cover
The lump sum paid on death remains the same irrespective of when, during the term, death occurs
Includes an option to protect against inflation by annually increasing the lump sum and premiums over the term of your policy

• Income on Death Benefit (sometimes known as Family Income Benefit)

Provides a monthly income to your dependants on your death
The income ceases on the expiry of the term you have selected

Our expert advisers will take you through the application process

They will ask questions about your lifestyle (e.g., your hobbies, your smoking and alcohol consumption), your occupation, your medical history, such as whether you have been hospitalised or been to see your GP recently and the outcome, your family’s medical history, your doctor’s contact details.

With your consent, your doctor may be contacted to provide a report on your health depending on your health, age, type, and amount of policy you want to take out.

These details are required by the insurance company to assess the appropriate premium. It is extremely important that you fill out this form truthfully and in full, as these details are fundamental to your contract. If you have any doubts as to whether something is relevant or not you should include it. This will mean that if you or your family do need to claim in the future, you can be confident that the claim will run smoothly

Yes, you can use an existing life insurance policy as long as:

• It is not in place to cover another loan or mortgage;
• The amount you are insured for is at least equal to the term and amount of your mortgage.

You would have to ‘assign’ the policy to your lender. This means you would agree to give your lender, the life insurance benefit to pay off your mortgage if you died during the term.

A life insurance assignment is a document that allows you to transfer the ownership rights of your policy to a lender, for instance when you take out a mortgage. You would be transferring all rights of ownership under your policy, including the rights to make decisions regarding coverage, beneficiary, and investment options to the lender. 
When taking out a mortgage for your family home it will be a condition of the loan offer that you have to life cover in place to cover the mortgage, not all lenders actually want an assignment of the policy though.

If the policy is a Mortgage Protection policy and was required by your lender to repay your mortgage, the benefit will be paid directly to your lender. That is if it was assigned to the lender.
If the amount of cover is greater than the balance due on the mortgage, the remainder will be paid to your estate.
If the amount of cover is less than the balance due on the mortgage, the remainder will be owed to the lender by your estate.

If the policy is for personal cover; then the benefit will be to the estate, your next of kin, or if the case of joint or dual policy then the benefit would be paid to the other policy owner.

If the policy was for business protection; then the benefit would be paid to the business.

If you have had an illness in the past that the insurance company needs to know more about, or If the amount of cover you require is very large, you may be asked to attend a doctor for examination and/or tests, you may also be asked to do a medical examination with an independent doctor and in some case this examination can be done in your home with a qualified nurse. You advisor will be able to advice the likelihood of this being required. This process is known as underwriting requirements.

For the large majority of applications, a medical examination is not necessary. Depending on the level of cover sought or information provided in your application, you may be asked to undergo a medical examination with an independent doctor or nurse.  The medical can be arranged at a convenient location and life insurance company will cover the cost.

• Single life:
  This is cover on one life only. The benefit is paid when this person dies.
• Joint life:
  This is cover on two lives. There is only one payment made under the policy. Typically, the payment is made when the first of the two people covered dies although some joint life policies may pay on the second death instead of the first death. The policy ends after the first pay out.
• Dual life:
  This cover is on two lives separately. If both people die during the term, the payment on death of each life is covered by the policy on death. If one person dies, the cover on that person is paid, the premium will reduce to continue the cover on the second person on the policy. This is the best type of policy to put in place for personal or family protection.

• Your ability to amend your Life Cover amount depends on the type of policy you choose: Some policies have a convertible option included which allows you to convert the policy to a new one, either to increase the cover and or extend the term, without providing medical evidence.

  Some policies don’t allow you to change the cover amount and require you to apply for a new policy.

  If the amount of cover is being increased or the term extended, you may need to provide medical evidence for the increase in cover or term extension.

  Some policies have a Guaranteed Insurability Option that allows you to increase the amount of cover within 3 months of moving house, getting married or having or adopting a child without having to provide evidence of health.

If your application is accepted and you have indicated when you want the cover to start, the policy will have been set up taking your wishes into account and send you your policy documents. If you have not indicated when you want the cover to start you will be contacted and the policy documents will be issued in due course.

Policy documents will be posted to you.  They include a policy schedule which contains the specific details of your cover (type and amount of cover, term of cover etc) and the policy conditions which set out the policy terms and conditions (e.g., definitions of terms, when the cover is payable etc.). You should keep the policy documents in a safe place for future reference.

We recommend that you apply for your cover at least 6 to 8 weeks in advance of the date you plan to draw down your mortgage. If your application is accepted, you will be informed, and your application can be kept on hold until you are ready to draw down your mortgage.

While it depends on the terms and conditions set out in your policy conditions, it is usually possible to re-instate your policy within one year from the date that the first unpaid premium was due. Restarting your policy is subject to the payment of all outstanding premiums and also requires that each life insured completes a Declaration of Health Form which will be subject to underwriting. You should contact the life assurance company, or your Financial Advisor and they will be happy to assist you.

Unless you have selected the Increasing Cover option, the premium is fixed throughout the term of your policy and will remain the same once the benefits are not amended during the policy term. If you have chosen, the Increasing Cover option (indexation) then the premiums and the protection benefits will increase on each policy anniversary.

It is your responsibility to ensure that your premiums are paid and received by the life cover when due.

If the life company does not receive your premiums when due, you stop paying your premiums or cancel your policy during the term, then your policy and any protection benefits it offers, will cease and no benefits will be payable.

In most cases, the life company will allow you 30 days for payment from the date that the premium is due. If the premium is not received within 30 days of being due your policy and protection benefits will cancel immediately without notice and you will no longer be covered by any protection benefits. If you have assigned your policy, the life company will notify the assignee (the lender) that premiums have not been paid and that cover no longer applies.

The cost of life cover will vary depending on a few factors. These factors are:

• Your age
• Your occupation
• Smoker or not
• If you have any pre-existing medical conditions
• The amount of Income you want to protect
• The term of the policy

It is very important to get advice from a Trusted Advisor before putting in place any policy. The policy needs to take account of your circumstances and what you need the policy for.
There is no “one fits all”.

We recommend speaking with your trusted advisor who will shop the market for you once you have established the correct cover and term etc.

You can get a quote from Zurich with the link below. I would suggest using this as a guide only though, as there may be easier options available. Speak with your advisor.

Life Cover Needs Calculator | Zurich Ireland

Oh Yes. There is a big difference between the providers when it comes to price. There are also big differences in terms of the policies themselves. Some providers also offer additional benefits.

Check these out.

From Royal London:Helping Hand – Royal London
From Aviva: Best Doctors® Second Medical Opinion – Aviva Ireland

From Irish Life: MedCare – Medical second opinion | Irish Life

So, not all life cover policies are the same.

The best advice is to seek advice.