By Dave Kavanagh

One of the issues with planning ahead to protect you and your family’s financial future, is the fact that we don’t know exactly what the future holds. Will jobs and income change? How long will I maintain good health? Will I win the lottery jackpot in the next 3 years? The uncertainty of the future means that we often plan for a variety of occurrences. One important aspect of this planning is deciding on a term for things like Life Cover. A life cover plan can either be done for a specific term or it can be done as a “whole of life” plan. One of the problems with the old way of doing these was that the premiums were reviewed after a few years and could result in constant, substantial increases, often forcing people to either cancel them or accept a much lower level of cover. With “guaranteed whole of life” plans, you at least know exactly what the premium will always be and the level of cover but planning that far ahead can be costly. A relatively new method of dealing with this issue was introduced from one of the life companies, and it is an addition called “Life Changes Option”. This option gives the policy owners a number of choices once they have paid premiums for at least 15 years. They can then choose to either; a) Stop paying premiums and reduce the level of cover which stays in place until the cover is paid out, or b) Cancel the cover (if it is no longer required) and take a refund of up to 70% of all premiums previously paid, or c) Continue the plan as it is with the same level of cover and premiums. This option has become quite popular when people are looking to future-proof cover as it offers choices that can suit people’s changing circumstances. If they have cleared loans and have sufficient savings, a reduced level of cover might be ideal. If they have strong pensions and savings, they may no longer have a need for cover and can take back a lump sum. For more information on how this type of cover may suit you, ask your advisor or contact me for a free quotation.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing Dave at info@financialcompanion.ie or use the contact form on financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial well being, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.