How to find the best life insurance in Ireland

Ensuring your loved ones are cared for when you die is a concern, but life insurance can ease the financial worry. Here’s how life insurance can financially protect your family and how to choose the best policy for peace of mind.

What is life insurance?

Life insurance pays a lump sum to your partner or family in the event of your death, but it does not cover serious illness or disability.

How does it work?

You’ll pay a monthly or annual premium and, if you die, your partner or family will benefit from financial support. The amount of money they receive will depend on the sum insured.

You can decide how much you want as a payout for your family and whether you want cover for a fixed term or your whole lifetime.

Types of life insurance cover

There are two main types of life insurance:

  • Term Life Insurance: The simplest and cheapest type of policy. It lasts for a set term, e.g. 20 years, and a payout is guaranteed if you pass away within the term.
  • Whole of Life Assurance: This payment guarantee will last your lifetime, but it’s more expensive. As long as you pay your premiums, your dependants will get a sum when you die.

What are the different types of term insurance?

The type of term insurance you choose will affect the cost of your monthly premiums over the term.

  • Level term: pays out a lump sum if you die within the specified term. The amount you’re covered for remains the same throughout the period.
  • Decreasing term: the amount you’re covered for decreases over the life of the policy. This type of term is used to cover a debt that reduces over time, such as a mortgage.
  • Increasing term: the amount you’re covered for increases over the length of the policy to keep in line with inflation and cost of living.

What’s the difference between life insurance and life assurance?

  • Life insurance is mainly used to describe policies that specify a set term. If you don’t die within the specified time period, then no claim can be made.
  • Life assurance is whole of life cover, which means that a payout is guaranteed after your death at any stage in your life.

Other types of financial protection

Life insurers often offer other types of financial protection that may be more suitable for your circumstances.

  • Serious illness cover: This pays a lump sum on diagnosis of a specified illness, including cancer, heart attacks, kidney failure, or dementia. The severity of illness may affect the payout.
  • Income protection insurance: This provides an income if you are unable to work due to illness or disability. The protection income is based on a percentage of your earnings and will contain a ‘deferral period’.
  • Mortgage protection insurance: This type of insurance is usually required by your mortgage lender and will cover mortgage repayments if you pass away.
  • Over 50’s cover: This product is specifically for people over 50 to pass on a tax-free lump sum and is whole of life cover. Medical underwriting isn’t needed for this type of insurance.

What other benefits can a life insurance policy offer?

A standard life insurance policy will only guarantee payment if you pass away, however, some life insurers may offer optional benefits to your policy.

Here are some of the additional benefits life insurers may offer:

  • Accidental death cover: pays out if accidental death occurs not as a result of illness
  • Terminal illness benefit: pays out before death if you’re not expected to live longer than 12 months
  • Critical illness cover: a lump sum in the event of diagnosis of a specific condition
  • Hospital cash benefit: cover if you need to stay in hospital for a period of time, up to 365 days
  • Personal accident benefit: financial support if you are permanently injured as a result of an accident
  • Family income benefit a type of life insurance that pays out a regular income from death until the end of the policy term

Policy exclusions and restrictions can be buried away in the small print so check the terms and conditions carefully.

How much does life insurance cost in Ireland?

The cost of your life insurance depends on your age, health, lifestyle and the sum insured.

However, premiums can be as low as €10 per month for a non-smoker in their 20’s or over €100 per month for a 50-year-old taking out life term insurance for 30 years.

Getting the best life insurance

The best life insurance policy is one that’s tailored to your family’s needs and protects their financial wellbeing at an affordable price to you.

It’s useful to shop around and get quotes to find out what you can afford and what you need to cover before making a final commitment.

To make sure you get the lowest price, it’s a good idea to use the same details for each life insurance quote and give genuine personal information.

Choosing the right type of life insurance cover

It can be difficult to decide what type of life cover best suits your needs. You may only want your life insured for mortgage protection purposes or need specified illness cover only. Make sure you choose the right plan for your circumstances.

The following factors can help you decide which life insurance plan works best for you. This information will be taken into account when you get a quote.

  1. Your age: the older you get, the more expensive the policy
  2. Your monthly income: how much can you afford to pay?
  3. The ages of your children: how long will you need to support them?
  4. Homeownership: how much mortgage debt is outstanding?
  5. Health and lifestyle: do you smoke or suffer a life-limiting illness?
  6. Amount of payout: how much money you would like to leave your family?

It is important when you are obtaining a life insurance quote to provide accurate personal information. Any misrepresentation on your application puts the life insurance benefit at risk.

Should I get dual or joint life insurance?

A joint life policy pays out upon the death of the first insured person, at which point the policy benefit ends. If you have a dual policy (two single policies as a couple), even after the first death, the surviving partner will still be covered and benefits will be paid. A joint policy is usually the cheapest option.

Where you can get life insurance

There are many insurance providers in Ireland offering life insurance and other financial protection policies. Compare life insurance plans by checking out these top life insurers.

Is life insurance worth it?

If you want peace of mind that your family will be financially supported when you die, life insurance should be considered.

Life insurance or other financial protection policies are worth it if you have:

  • A partner who relies on your income
  • Young children
  • Family living in a mortgaged house

Life Insurance FAQ

Can I change my level of cover or switch my provider?

Yes, you can. It is worth reviewing your policy periodically because life circumstances change. If you need to change it, you can either:

  • ask your insurer to alter your policy
  • cancel your policy and shop around for another

However, bear in mind that as you get older, premiums will rise. Your existing cover may work out cheaper than any new policy

Can I get life insurance at any age?

Some life insurers may cover seniors, although typically the age limit is around 75 years and it gets more expensive, the older you get.

Life insurance is cheaper when you’re younger because premiums are calculated on the basis of risk. For instance, if you are 50 and a smoker, your premiums will be higher than if you were a 25-year-old non-smoker.

Do I need Mortgage Protection Insurance if I buy a house?

The lender is legally required to ensure you have mortgage protection insurance before offering a mortgage. However, there are some exceptions:

  • You are aged 50 or older
  • You already have adequate life insurance to pay your mortgage
  • The mortgage is not for your main residence

The lender may take into account individual circumstances, such as prohibitively high premiums.

How long should I get term life insurance for?

It depends on how old you are when you take out the insurance. You should also consider the ages of people in your family and the years you have left to repay your mortgage.

What happens if I cancel my policy?

If you decide you no longer need life cover or cannot afford to pay the premiums - you can cancel your policy but you won’t get your money back. Whole of life cover sometimes offers a ‘surrender value’ but it’s usually worth a lot less than what you paid in.

What is indexation?

Indexation is an option that you can choose to increase your life cover in line with inflation. Each year your premium will increase, say, 2% and the rate your benefit will also increase but at a lower rate. For example, a 2% increase in your premiums will result in a 1% increase in your benefit.

Who regulates life insurance providers?

Life Insurance providers are financially regulated by the Central Bank of Ireland Providers will need to display a registered address on their website.