LIFE ASSURANCE FAQ’S
Updated: Apr 5
Citywide Financial Solutions are independent mortgage and insurance brokers totally committed to protecting our clients with the very best advice and guidance.
Rob O’Neill and his team always welcome the opportunity to speak with you whether you have a general life insurance query or need assistance in finding the most appropriate policies for you.
We outline here some frequently asked questions on life insurance and related topics...
What is Life Assurance?
Life Insurance or Assurance is a contract drawn up between you and an insurance provider that if you pay an agreed schedule of regular premiums and are agreeable with the terms and conditions laid out in the policy, the provider will pay out a lump sum to a designated beneficiary in the event of your death.
How does Life Assurance work?
There are a wide and varied range of life insurance policies available which can be tailored to suit your precise needs and requirements.
When you decide on to buy life assurance,you will be given options on how much your policy costs in regular premiums, how much your beneficiary is paid in the event of your death and the exact duration of the policy.
You will be asked questions about your health, lifestyle and any medical conditions.
Insurance companies make their profits by investing the money you pay in premiums. Consequently, over a lifetime, the money earned from investments will cover or even exceed the death benefit paid out.
What way is Life Insurance paid out?
When taking out a life insurance policy, it is important to know when exactly the claim will be paid out.
To begin the claiming process, the life insurance company should be contacted as soon as possible following the death of the insured.
The beneficiary of the life insurance policy will be required to provide a copy of the policy along with a statement of claim.
A certified copy of the death certificate will also need to be submitted.
What is the time period for the Life Insurance company to pay out on a policy?
Normally, it takes Life Insurance companies anywhere from 30 to 60 days to fully process a claim.
The claim pay out can take much longer if the insurance company does not receive all the necessary documentation or if it requires an investigation into the claim.
Do I really need Life Insurance?
Life Assurance is designed to give you the reassurance that your dependents will be looked after if you’re no longer there to provide for them.
The majority of families rely on the income of a working adult, so losing this can have a detrimental effect on the household finances, especially if that family member passes away suddenly or unexpectedly.
What is the difference between Mortgage Protection and Life Insurance?
They both cover you in the event of death. Mortgage protection is designed to pay off your mortgage in the event of death.
When should I consider taking out a Life Insurance policy?
There is really no set age when considering taking out life insurance but many people initiate a policy in the following situations....
You’ve just started married life..
Joint life insurance policies are designed to cover couples or partnerships in the occurrence of either partners demise.
Traditionally many policies were set up to cover the main breadwinner of the family as this person made the most significant contribution to the running of the household.
But the consequences of the other partners death -even if they don’t earn as much , or have no income at all (owing to having to look after the children full-time) can be a serious issue from a financial perspective.
That’s why it is well worth contemplating taking out life insurance that covers either partners demise.
A new Baby...
It goes without saying that raising children can be particularly expensive..so your income or that of your partner is more than likely the only way to pay for the everyday costs that come with looking after a child.
If you or your partner were to pass away, it would have a considerable financial impact in addition to the overall emotional stress.
Having life insurance in place is one way of financially alleviating this situation as the proceeds from a life assurance can offer a replacement income.
How do I decide on the type of Life Insurance that is best for me?
Choosing the right life insurance policy means calculating how much money you need to protect your dependents. This amount should take into account their living costs,as well as any outstanding debts such as an outstanding mortgage.
Will I pay more if I take a Life assurance policy through a broker?
No. The broker will shop around for the best deal on the market that meets your needs.
What are the different types of Life Insurance policies?
The following are some types of life insurance policies on the market...
Level Term Life Insurance
This is one of the simplest forms of life cover and affordable for most people.
The policy lasts for a pre-agreed number of years and pays out a set amount if you were to pass away during that term.
This type of policy can either cover a fixed debt such as an interest-only mortgage or to provide a lump sum for your dependents on your death.
Decreasing Term Life Insurance
Also known as Mortgage Protection Insurance, this policy also lasts for a pre-agreed number of years (which normally matches the duration time of the mortgage) and pays out a set amount if you were to die during that term.
Each year the potential pay-out decreases as it is designed to be used in conjunction with a repayment mortgage where the loan outstanding decreases over time
Whole of Life Insurance
This policy gives you cover for your entire life and provided your monthly payments are maintained , your dependents will receive a pay-out no matter when you pass away.
The policy is typically more expensive than those covering a set period of time.
Family Income Benefit Insurance
This type of life insurance provides a regular monthly income for your loved ones if you were to pass away during the set time period of the policy.
For example, if you were to take out a 20-year policy and die 6 years into it, your family would receive a regular monthly payment for the remaining 14 years.
If you were to pass away 15 years into the policy, it would pay out for the remaining 5 years.
In deciding how much cover and for how long, you might want to protect your children’s standard of living and expenses such as school or university fees to an age where you would expect them to be financially self -sufficient.
Critical Illness Insurance
Critical Illness Cover or Serious Illness Cover pays you a tax-free lump sum if you’re diagnosed with one of the critical illnesses specified on your policy during its term.
Should you adjoin it to your existing life insurance policy, it will be in the form of additional or combined cover.
A Standalone Critical Illness policy means that you get a lump sum payout if you become critically ill and if you pass away during the term of the policy.
Accelerated Critical Illness Cover policy pays only once.... either if you are diagnosed with a serious illness OR if your death occurs during the term of the policy.
Family Life Insurance (including children’s Life Assurance)
Most life assurance policies will also include between €4,000 - €8000 children’s life assurance benefit on them as a free added benefit.
Terminal Illness Cover
Terminal Illness Cover is completely different to Critical Illness Cover and is usually included as part of a standard life Insurance policy.
A terminal illness is one that is diagnosed to be no known cure or is at at an advanced stage where it cannot be cured and in the opinion of your doctor / medical consultant will lead to your death within 12 months.
The policy pays out at the diagnosis stage of the terminal illness rather than waiting to pay out after the demise of the policyholder.
Why Citywide Financial Solutions can find the best Life Insurance deals for you?
Our team at Citywide Financial Solutions have ready access to a comprehensive database of all the main life insurance providers where we can update the information they use in real time.
This facility allows us to advise our customers on the very best rates and choices on the market to suit their exact requirements.
If you are unsure about any aspect of life insurance, we would be delighted to discuss it with you anytime.
01 513 8710