How much does life assurance cost?

November 14, 2011

Great question!  While this question has all the merits of a ‘How long is a piece of string?’ question, it can actually be broken down into a few questions to provide a very definitive answer.  First off, why do people take out life assurance?  It’s not really a luxury, as its main purpose is to replace something that would have been, had something else not happened.  E.g. There is normally at least 1 person in every household who brings home money from working and this money is used to run your household (pay bills, holidays, entertainment, food shopping, school fees etc.)  If this person were to die prematurely or during their working life, how would this money, that would have been earned,  be replaced?  A life assurance policy will provide a lump sum of money on the death of the life that is covered.

  • How long had this person planned on working?  Let’s say to normal retirement age of 65.  We now know how long we need the life assurance for – 22 years.
  • How much cover is needed?  Depending on an individual’s circumstances (number and ages of children etc.), the basic recommendation is between 5 and 15 times their gross annual income.  When calculating where your family fall into on that scale, people should take into account that they may have cover through their work and that a mortgage protection policy will clear the mortgage on their home.  Let’s say we go with 7 times income for a family with 2 earners and 2 children.  The main income earner that we are covering today, is aged 43 and they earn €70,000 gross per annum.

So, in this case, we are looking for a life assurance policy that will cover a 43 year old, non-smoker, for 22 years (retirement age 65 – current age 43) and for €490,000 (7 times €70,000).  This cover would cost from €16.98 per week.  If this person is self-employed, the policy could qualify for tax relief, so the premium would be €10.02 per week.  Sensible extra benefits could be added on as required such as the conversion option, which allows the person to change their policy to a longer term policy without answering any more medical questions, some serious illness cover or indexation, which automatically increases the amount of cover by a set amount every year.

Our job is to do this for you.  The premium that we quoted above of €16.98 per week is from life assurance company A, whereas for the exact same thing, life assurance company B charges €26.59 per week.  We’ll guide you through the questions to determine a good plan, then shop for the most suitable and best priced plan, help you to complete the forms and then organise everything for you until your policy is active and your life is covered. It gives great peace of mind knowing that this is done.  We do not charge you a separate fee as our fee is paid for by whichever life assurance company you proceed with.  We tell you how much this is before you start your policy.

 

Stop putting off organising your cover –

Phone a Med Protect advisor today on 1890 254 000.

Likewise, if you already have cover, give us a call to see if you have the right type, amount and price.