So we’ve done the car insurance thing, and health insurance – but the one we seem to leave off the longest is life insurance (and nope, mortgage protection is not the same thing).
Perhaps we’re uncomfortable with the connotations, or maybe we just haven’t reached the stage where we think we need it yet, but there comes a time – eventually – when we think about it – and it usually coincides with having a family.
So do you actually need it? There is a lot of confusion around life insurance – so with our simple, easy to understand guide we’re here help you make an informed decision.
So what exactly is life insurance?
Put simply, life insurance is a plan put in place to provide financial security for your family. In the event that something happens to you, a payment would be made to ensure they can live a relatively normal life.
Do I need it?
If you have children or a spouse / partner relying on you financially, life insurance is advised, yes.
I do have children; why should I get it?
Children are called ‘dependents’ for a reason. On a basic level they’re dependent on us for food, clothing and shelter, but as parents we also have to pay for the likes of schooling, medical bills and recreation.
Put into perspective, a study carried out by laya life in 2015 of 1,000 parents of children aged 0-21 years across Ireland showed it costs €105, 321 to raise a child from ‘cradle to college’. Broken down, this equates to over €4,000 per year for university, over €3,000 per year for food and over €4000 annually for childcare.
And these are the sure things – life is unpredictable, so there can be extra costs like burst pipes, or a broken down washing machine, or a blown gasket in the car. Yep, being a grown-up is great.
So simply put, life insurance is an ‘income replacement’ so your family can continue to pay these everyday expenses.
OK, so how do I know what policy to go for?
It depends on how long you want life insurance for, bearing in mind the age of your kids, as well as your particular circumstances, like the cost of running your household. And if things change, there can be the option to review your policy. Don’t worry though, figuring all that stuff out is actually really easy.
