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 firstname.lastname@example.org 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.