By Dave Kavanagh

When people think about insurance cover for themselves, it’s usually Life Cover that springs to mind. Something that pays out a sum of money in the event of death is not everyone’s favourite topic over a coffee. But other types of cover, sometimes referred to as Living Benefits, should certainly be considered by anyone that would suffer a financial loss in certain eventualities. Firstly, Income Protection. If someone cannot work due to any illness or injury and suffers a loss of income, they can be paid up to 75% of their usual salary, either until they can return to work or up to a chosen retirement age if they can never return to work. Consider what the impact would be if your current salary dropped to the current state illness benefit for a couple of years. Next, Serious Illness Cover. This pays out a tax free lump sum on diagnosis of any of the illnesses that are covered. While companies in Ireland cover approximately 50-60 different illnesses (as well as many more minor events that pay partial payments) the vast majority of claims here, are for Cancer, Heart Disease, Stroke, Multiple Sclerosis and Loss of Independence. The key is to get cover in place while you are relatively young, not just because there is a much higher chance of being accepted for cover but because the premiums are so much cheaper. At present, a 29 year old putting a convertible term plan with €250,000 life cover and €100,000 serious illness cover for a 30 year term, would cost €48.05 per month. A 49 year old doing the same levels of cover but for only a 10 year term (both finishing at age 59) would cost €127.00 per month. Lastly, introduced in recent times is Multi Claim Protection Cover. Similar in many ways to Serious Illness Cover, this option allows people to claim for more events on a needs basis. For example, if someone was diagnosed with cancer, a percentage is paid out. If they were required to stay in hospital for a certain period, a further percentage is paid out, and again if follow up treatment is required, another payment. While everyone’s needs are different, it’s worth taking time to see what is right for you.
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 him at info@financialcompanion.ie or use the contact form on www.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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

So, February 2023. The time when many “New year, new me” changes may have faded into memory. So many great intentions of life improvements were planned: get healthier, spend more wisely, have more money, relax more, stress less, start a new hobby. All noble intentions, with one thing in common – they require you to make some changes and make time for those changes. For some aspects, this is easier than it is for others. Relax a bit more? Sure. Spend some “Me Time” in the gym? Absolutely. Do some work on planning the finances? “Errrrr…maybe I’ll start on that next week”! Without realising it, many people subconsciously view dealing with financial planning as “negative”. Understandably, who wants to sit discussing the potential loss in the event of a fatality, or a serious illness, or not being able to work, or thinking forward to the last third of your adult life? If any of these type of events would cause a financial loss to you or those dependent on you, making some time to at least establish what options are available, is the least you should consider. There are so many other benefits to reviewing your finances, not least of which, it can leave you with more money! Two of the tips I constantly tell people is to examine 3 months’ bank statements and to do a monthly spending exercise. Going through the bank statements can help identify things that maybe you should no longer be paying for, or that you are duplicating. Keeping a spending diary for a month will give you a clear picture of detailed outgoings, allowing you to identify spending that you could possibly do more efficiently and permit you to make any changes necessary. The end result of making the time for such an important topic, will not only usually leave you better off financially, but put you more in control of your finances, thereby reducing the stress/anxiety often associated with money. One hour is 4% of your day. Make the time.

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 him at info@financialcompanion.ie or use the contact form on www.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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

January is traditionally a time when many people embark on making some positive changes or improvements in their lives. The most recognisable of these is the ‘losing weight/getting healthier” one. To give people more of an incentive to maintain what they start, it’s worth noting that if done properly, losing weight can have the added bonus of leaving you with more money at the end of each month. So how does that work?? Well, by “doing it properly” I refer to NOT going on a diet, or buying products with magic properties that will make the weight just fall off. Instead, making small, sustainable lifestyle changes. It can be adding some exercise in week 1, drinking more water (and less alcohol/sugar laden drinks) in week 2, reducing portion sizes in week 3, substituting things like chips for wholegrain rice or pasta in week 4, breaking the association of biscuits/cakes whenever you have a coffee or tea in week 5, etc., etc. Doing it this way, makes it sustainable and when weight is dropped slower over a longer period of time, it is far more likely to be kept off. So how does that help my finances? When I analyse people’s spending budgets, it’s clear that takeaways, alcohol, sweets, cakes biscuits etc. pop up quite frequently. If you keep track of the savings when you cut down on many of these things, it’s easy to see how much you can save. One person I was helping used to enjoy her “treat” of a chocolate eclair most days. When she accepted that she felt bad after eating it and conceded that it was not helping her goal to lose weight, I suggested it was more of a punishment than a treat. I proposed that she put the money into a jar each day and when there was enough, to treat herself to a back massage, which can positively reinforce the good changes someone has made. Make the right choices, one day at a time.

By Dave Kavanagh

Are there actions you can take to make the festive season less of a financial burden? Of course there are.Firstly, manage expectations: Most people can’t remember what they got 2 years ago, so don’t put yourself under too much pressure for “big” presents. Next, leave the credit card at home: At about 20% interest, adding debt for things you don’t need to overspend on, only starts the new year off in a negative.Be realistic with food shopping: The shops are only closed for 1-2 days, do you really need to stock up so much? In the days/weeks after Christmas, make a list of all the things you bought but didn’t really need or through out, and keep it for next year, so you don’t repeat the same mistakes. Kris Kindle: Talk to family and close friends to agree to pick one person and buy them a present for a set limit, to ease the burden.There are things you can also do all year round that can save you enough to cover the cost of Christmas: Switch utility providers, the savings can be quite substantial. Compare before you shop for larger items: Just because one store has a sign saying the TV you want is reduced from €799 to €699, doesn’t mean that another store that does not have a sale on, isn’t selling the same TV for €649. Take the time to shop around when your car or house insurance renewals come in, it can be well worth the effort. Review premiums that you pay regularly, such as mortgage protection or life cover, especially if they were taken out directly with a bank who could not compare. Finally, go through a few months’ bank statements: we regularly find people paying for things that should have been cancelled years before or that they simply no longer require.

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 him on info@financialcompanion.ie or use the contact form on www.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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

Many couples have joint plans in place for things like Life Cover. That is fine if the couple are married, but not if they are not married. Due to our very dated Capital Acquisition Tax laws, if an unmarried couple have a joint policy, in the event of a claim the survivor could be facing a large tax bill. This is because married couples can give or bequeath any value of assets without there being a tax liability. For a cohabiting couple, they are treated in the “strangers” bracket of amounts you are permitted to receive before tax is due. This did not change in the recent budget, so after a tax free threshold of €16,250, any balance is taxed at 33%. So if we take John & Mary as an example, who have a joint life policy with €250,000 life cover, in the event of John passing away, Mary will be paid out the policy proceeds but also now has a tax bill of €35,887.50 (this assumes premiums were paid from a joint account that they both contribute to, if John paid the premiums from his own account, Mary’s tax bill would be €77,137.50!) So how can you avoid being liable for such a large, potential tax bill? The correct advice when commencing cover for an unmarried couple should be, instead of setting up a joint plan, to set up two “life of another” plans. So John takes out a plan on Mary and pays the premiums and Mary takes out a plan on John and pays the premiums for that. When done this way, if the same as above happened and John passed away, Mary is deemed to have paid for the cover herself and so is not liable to pay any tax, meaning she receives the full €250,000 policy proceeds and no tax bill. It’s worth also noting that unmarried couples that buy a house together can face a similar problem if one of them passes away. The survivor that inherits the deceased’s share of the property may then be liable to pay tax on that portion of the property. There are ways to plan for this and to be exempt. If anyone is in either of these situations, please get in touch for advice.

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 info@financialcompanion.ie or use the contact form on www.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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

People who rent privately where they live, compared to home owners, can be a lot more vulnerable. Apart from the obvious points, like rents being increased or having to move out if a property is being sold, there are other potential events that could prove problematic for renters. As we saw in the early part of the pandemic, where many people’s incomes were drastically reduced, those with mortgages were permitted to avail of “payment breaks” with minimal effort. Unfortunately, those renting do not usually have the flexibility of this option. When someone cannot work due to illness or injury, they may suffer a loss of income, either immediately or after a short period, resulting in the inability to pay rent. This could lead to eviction and all of the problems associated with it. While those renting may not have been exposed to the kind of financial advice as someone going through the mortgage process, there are still safeguards that can be put in place. One option is Income Protection, paying them a portion of their income if they were unable to work due to illness or injury. This could be the difference between affording rent or being evicted. Something not often considered by renters is Life Cover. If one of a couple renting passed away, this could allow the surviving partner (or family) to purchase their own home immediately without the need for a mortgage. Similarly, Serious Illness Cover could pay out a tax free lump sum on diagnosis of one of the illnesses covered, giving another layer of financial security. Better to consider these options earlier rather than later.

By Dave Kavanagh

Many people are in the “it’ll never happen to me” group, when it comes to planning for events that could potentially impact finances. Let’s face it, nobody wants to think that anything “bad” will happen to them but the reality is, bad things happen whether we like it or not. The three areas that are most prevalent to this topic are, Life Cover, Serious Illness Cover and Income Protection. Of course, we would hope that we are not going to die prematurely, we are not going to get seriously ill and accident or illness will not prevent us from being able to work. Sadly, in this small country of ours, over 7,000 people die each year NOT of natural causes (under age 65), we are heading towards 43,000 new cancer cases every year (the cause of more than 50% of Serious Illness claims) and the average time off work for an income protection claim is close to 5 years! When I do group talks, I often ask the question whether anyone’s close family or friends have been affected by cancer? I have only ever had one person say “no”. When I ask whether the same close family or friends have ever won the lotto jackpot, not surprisingly, it’s (almost) always “no”. Yet with odds of 10.7 million to 1 to win the lotto jackpot, people spend a relatively large amount of money each week on lotto (and Euromillions and scratch cards etc.) believing and hoping that it will happen to them. The same people have a 4 to 1 chance of being diagnosed with one of the Serious Illnesses covered BEFORE they are 65. We often review people’s finances and see that they have their vehicles insured, their house insured, their pets, mobile phones, lap tops and jewellery insured but not themselves! It’s not until one of these events happens that people can fully appreciate the financial loss that is suffered. An important detail is that even if people have cover in place from a few years back, they could well be paying over the odds premium wise or it may no longer be most appropriate. Take the time to check what is most appropriate for your specific circumstances.

By Dave Kavanagh

Every year, I see examples of people who have done all the right things in preparing to apply for a home loan to purchase their new home. They have saved regularly to build a deposit, maintained stable employment, avoided taking out new loans (and made sure any existing or previous loan obligations were paid in full and on time), conducted their current accounts efficiently, etc. but sadly, they don’t get to proceed with their house/apartment purchase (certainly not in the time frame they wanted to) because they cannot get their mortgage protection life cover accepted. This can be for a number of reasons but primarily it comes down to this.When you apply for any form of life cover, it is underwritten based on your current and past medical history. If someone has had any adverse medical conditions, if deemed serious enough, it could prevent cover being granted. More commonly, someone may have been recommended by their GP or consultant to have certain tests done, but they never got around to it. This would usually prompt a life company to postpone a decision until the tests are done and satisfactory results are available. Depending on the type of tests, this could take months to get sorted. For these reasons, anybody planning to apply for a mortgage should research how they will be underwritten for mortgage protection at an early stage, particularly if they are concerned that a past medical issue could be a problem. In the current climate regarding Covid-19, many are even getting their mortgage protection in place early and extending the term so that they are certain of having cover in place, when it is time to draw down the home loan. Once cover is in place, any new medical issues that arise will not be relevant.

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 info@financialcompanion.ie or use the contact form on financialcompanion.i 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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

During a consultation with new clients recently, I asked if they had serious illness cover in place. They said that they did. When I asked for the details, they were unsure so searched for their policy details. It turned out that they had PPI (Payment Protection Insurance) and misinterpreted the word “illness” somewhere in the description. They did not have serious illness cover. (The PPI “might” have paid out a few hundred euro towards their mortgage payment if the person covered was out of work due to illness or injury and only after a 2 month period and then stopped after 12 months, whereas serious illness cover can pay out a tax free lump sum on diagnosis of one of the conditions covered). It was yet another reminder that most people do not know the important details of plans that they pay regularly for. As people’s circumstances change, it’s important to be up to date with knowing what you are actually paying for. Here is the very least that you should know about any protection plans that you have in place:

Life Cover: How much cover is there? When does it expire? Is it dual or joint? Does it have a conversion option? Is it level, increasing or decreasing? How much does it cost?

Income Protection: What is the deferred period? (The length of time you have to be off work due to illness or injury before payments commence). What level of cover do I have? Up to what age will payments continue if I could never return to work again? How much does it cost? Have I claimed my tax relief? (I.P. premiums are tax deductible).

Serious Illness Cover: A.K.A. Critical Illness Cover or Specified Illness Cover. What level of cover do I have? Is it stand alone or accelerated cover? Is it dual or joint? When does it expire? Do I have the option to extend cover without further medical evidence? If you don’t know those details, it’s time to get out the paperwork and find out. You’ll be glad you did.

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 info@financialcompanion.ie or use the contact form on financialcompanion.i 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 wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

For many reasons, people often put off having to deal with their finances (it’s not the most fun exercise!) despite the fact it can give them peace of mind, reduce outgoings and often leave them with more money left over each month. But what are they really saying?
“I’ll have a look at that after Christmas”. Often replaced with “after Easter”, “after the holidays”, “after the kids go back to school” and a few others. What is actually being said is “I’ll name some time in the future so that I don’t have to deal with it now”. Let’s face it, you can easily find 30-60 minutes once a year to deal with something this important. You’ll be glad you took the time. “We have everything in order already”. Great. That is if it’s been reviewed in the last few months, but on closer examination, it often hasn’t been looked at in years and circumstances have changed. It’s important to keep things relevant to your current personal circumstances. “Our bank sorted everything for us”. Your bank may have sorted a few things, but in most cases, banks are tied to one company, so a fair comparison cannot be made, meaning you could be paying way over the odds for whatever the bank has put in place for you. Dealing with an advisor who is not tied to one company and can compare other options is the only way to make sure you get the best value. “I’m busy at present, I’ll give you a shout in a few months”. Let’s face it, going through your finances is rarely on anyone’s list of favourite activities. But the fact remains, if there is an activity that you like you will make time for it. Burying your head in the sand is rarely a successful solution to most problems. Someone once told me that they had no time and in the same conversation told me they had queued for over an hour in a drive through for doughnuts. (They were also up to date on all the soap storylines!)

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 info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570, 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 wellbeing, positivity and motivation. As heard on RTE 2FM and TV3.