How important is life cover for your Family?

You never know what is around the corner and in truth nobody really wants to think about getting sick or dying, but life is full of unexpected events and protecting your family is one of the most essential financial decisions you can make. You need to ask yourself, if something does happen to you prematurely, how will your family cope financially? How important is life cover?

If you have dependents, then life insurance is vitally important, as it ensures that your dependents have a better chance of being able to survive financially. It means your family could get a lump sum if you die or become seriously ill, or you could receive an income if you are unable to work because of an illness or injury. This could help to maintain your standard of living and make sure that your children and dependents will have all the opportunities you’d love them to have, such as going to university, starting a business, buying a home etc.

However, for some reason life insurance is a topic most people don’t want to think about – let alone talk about – and it is often put down the list of priorities.

What should we protect?

We insure our home, our car, our holidays and sometimes even our family pets but the very thing we often overlook to insure is the most important of all, ourselves and our families.

Many people do not realise the financial impact that an unexpected serious illness, injury or premature death can have on a family. The unfortunate reality is that Irish families are struck by these events every day and the financial impact can be significant and long lasting.

Having a life insurance plan is an effective way of providing peace of mind knowing that should the worst happen, your loved ones will have the financial security they need at such a difficult time.

You can set up your life cover to pay a lump sum amount, a monthly income amount or both.

Choosing a policy

There are various types of cover available in the Irish market currently, I have detailed 3 of the most common forms of insurance that my clients consider:

  • Lump Sum on Death Benefit: this pays out a lump sum in the event of death, or in certain circumstances on diagnosis of a terminal illness, during the term of cover.
  • Income on Death Benefit: this pays out a monthly income on death or, in certain circumstances on diagnosis of a terminal illness, for the remainder of the term of cover.
  • Whole of Life Benefit: this pays out a lump sum on death. The difference with this benefit is that it will be paid out even if death occurs following the end of the term of cover for the main benefits. If, for example, your term of cover ends at age 65 for other benefits and you die at age 90, this benefit will still be paid out provided that you have paid all premiums when due.

I regularly ask my customers:

  • Would their family be able to maintain their lifestyle in the event of their untimely death?
  • Would their family be able to live off savings if you were unable to work due to illness or injury, taking into account any extra medical expenses alongside usual outgoings?
  • Have you put a plan in place to look after your family should anything happen?

When should you get cover?

People should try and get cover in-place when they’re younger and healthier, as they may get the cover they require for a lower monthly cost, and this will pay off financially in the long run. You should also review your lifestyle. Simple things such as quitting smoking, healthier eating can help you save on insurance.

By discussing your requirements with your Financial Advisor, you will get a more comprehensive assessment of your needs and what level of cover you need. Your adviser will also have a good understanding of what is available on the market currently and what to look for in terms of costs and the most appropriate solution to meet your needs.

Talking about leaving your loved one’s is not something we want to consider, but it’s worth some thought. By setting up a way to support your loved ones after you die, it can certainly help ease your family’s suffering and allow them to live the kind of life you would have wanted for them.

That’s where life insurance can help.

Gerard O’Brien LL.B LL.M CFP® QFA is a Certified Financial Planner and the Owner of Heritage Wealth, a Financial Planning practice based at 96 Main Street, Midleton, Cork. For more information, contact Gerard at