Life assurance is a crucial part of financial planning, helping to protect your loved ones in the event of your passing. With several types of policies available, it’s essential to understand your options before making a decision. Here’s an overview of the main types of life assurance policies we would consider when recommending a plan to fits your needs.
1) Term Assurance – Affordable Protection for a Fixed Period
What It Covers:
✔ Provides coverage for a set term (e.g., 10, 20, or 30 years).
✔ Pays a lump sum to beneficiaries if you pass away during the policy term.
✔ Premiums remain fixed, with an option to increase coverage to keep up with inflation.
✔ If you outlive the policy term, coverage ends, and no payout is made.
Best for:
Individuals looking for affordable, temporary coverage to protect their family during key life stages (e.g., raising children, paying off a mortgage).
2) Serious Illness – Financial Support if you are Diagnosed with a Serious Illness
What It Covers:
✔Provides a tax-free lump sum upon diagnosis of a serious illness such as cancer, heart attack, or stroke.
✔ Can be used for household bills, medical expenses, or specialist treatment that is not covered by health insurance.
✔ Helps support you and your family financially if you are unable to work due to illness.
✔ Can be added as an extra benefit to most life insurance policies.
✔ Not all illnesses are covered, so it’s important to review your policy details.
Best for:
Individuals who want financial protection in case of a serious illness.
Families who rely on a primary income earner and need financial stability during recovery.
3) Cancer Cover – Financial Support if you are Diagnosed with Cancer
✔Cancer Cover is different to traditional serious illness plans as it focuses solely on cancer and therefore, it costs less than serious illness protection.
✔ Provides a tax-free lump sum upon diagnosis of a cancer of a specified severity.
✔ Can be used for household bills, medical expenses, or specialist treatment that is not covered by health insurance.
✔ Helps support you and your family financially if you are unable to work due to illness.
✔ Can be added as an extra benefit to most life insurance policies.
✔ Most of the severe forms of cancer would ordinarily be covered, but please contact us if you have a specific question.
Best for:
Individuals who want financial protection in case of a serious cancer.
Families who rely on a primary income earner and need financial stability during recovery.
4) Decreasing Term Assurance – Mortgage Protection
What It Covers:
✔ Designed to match the balance of a reducing debt, such as a mortgage.
✔ Ensures that your mortgage is cleared if you pass away before it’s fully repaid.
✔ Premiums are typically lower compared to level term assurance since the payout amount decreases over time.
✔ This policy is not ideal for leaving a lump sum to dependents, as coverage declines.
Best for:
Homeowners looking to protect their family from mortgage debt in the event of their death.
5) Whole of Life Cover – Lifetime Protection
What It Covers:
✔ Provides lifelong coverage, ensuring a payout whenever you pass away, if premiums are paid.
✔ Can accumulate a cash value over time, which can be borrowed against or used to pay premiums.
✔ Premiums tend to be higher as coverage lasts a lifetime and guarantees a payout. Premiums may be reviewed and increased periodically.
Best for:
Those who want to guarantee a payout for their beneficiaries.
Individuals with long-term financial planning needs, such as estate planning.
6) Convertible Term Assurance – Flexibility for the Future
What It Covers:
✔ Allows you to convert your term policy into a whole of life policy or another type of life cover without a medical assessment.
✔ Provides flexibility if your health deteriorates, making it difficult to secure new coverage later.
✔While premiums may increase after conversion, the guaranteed conversion option ensures continued coverage.
Best for:
Individuals who may want the flexibility to adjust their policy later in life.
Those concerned about future health issues impacting their ability to secure coverage.
Finding the Right Policy
Choosing the right life assurance policy can indeed feel like navigating a minefield, but it doesn’t have to be overwhelming —it’s about peace of mind so you can confidently select a policy that protects your loved ones and ensures financial stability for the future.
At Derradda Financial Services, we will help you choose the right life cover and will:
- Assess Your Needs: Understand your financial situation, goals, and the specific needs of your dependents.
- Explore Options: Review the different types of life assurance policies to find the one that best fits your circumstances.
- Recommend Solutions: Provide advice on the most suitable policy, ensuring it aligns with your financial goals and offers adequate protection.
Get in touch to find out how we can help.
📞Call us: Dublin Office 01 2330209 / Galway Office 091 399256
📧 Email us: info@derradda.ie