Everything you need to know about Life Insurance
Life Insurance Policy is a contract made by a person with an Insurance Company. The purpose of this type of Insurance is that the insurance company will pay a lump sum amount to the beneficiaries named by the insured person in the case of the death of the insured person. Typically the type of insurance policy an insured person chooses is determined by the goals and the needs of the insured person. There are three types of life insurance policies.
What Is Term Life Insurance?
This is a contract between a person and an Insurance Company that is designed to last for a specified period of time. The term period may be 10, 15 or 20 years. Should the insured person die during the period of the term, the named beneficiaries of the deceased would receive an insurance payment.
What Is Universal Life Insurance?
This is a type of policy that provides a lifetime coverage to the insured person. One unique feature of this policy is its flexibility. The insured person can raise or lower the premium coverage amounts anytime during the lifetime of the insured person.
What Is Whole Life Insurance?
This is another type of permanent insurance policy that provides lifetime coverage. The difference between whole life and universal life insurance is that in a whole life insurance policy, premiums are fixed, they cannot be raised or lowered.
Who needs a Life Insurance?
A person who has dependants such as school aged children really needs an insurance policy. This is the best way to provide for your family after death. The death benefit will help your family take care of financial needs when you are no longer around to do so. If you have loans or debts to repay, then you need an Insurance policy to spare your next of kin the headache of inheriting your debts.
What is Life Assurance?
Life Assurance is different from Life Insurance. Although they serve the same purpose. Life Assurance is a mix of insurance and investment. The way a Life Assurance Policy works is that when the insured person dies, the investment value of the total premium paid by the insured person is what is paid out as death benefit. The investment value of your premium is determined by the investment performance of the insurance company and how long the insured person has been paying the Life Assurance premiums.
What you must decide before you subscribe to an Insurance Policy:
There are certain decisions a person who intends to subscribe to an insurance policy need to make before the subscription. They include:
(i) Amount to be paid out as death benefit:
Take for instance, if you are subscribing to an Insurance Policy in Ireland, this is the first decision you need to make. You must specify the amount you want to be paid out as death benefit. This will determine the amount of premium you will pay and how you will pay the premium.
(ii) How long you need an Insurance Coverage:
A Person seeking Insurance also needs to specify how long the insurance is needed. An Insurance Policy can either be temporary or permanent. Examples of permanent insurance policies includes the Universal Life and Whole Life Insurance. On the otherhand a term life insurance policy is a temporary insurance policy.
How to apply for life insurance in Ireland
There are several Insurance Companies in Ireland that offer Insurance. Among them are Irish Life, Aviva Life and Pension, Friends First, Royal London, New Ireland among others. The process of getting an Insurance is practically the same in each and every one of this institutions. As a person seeking Insurance, you would be given an application form usually referred to as a "Proposal Form" This form contains personal questions like details of your medical history, lifestyle, job description, hobbies, eating, drinking and smoking habits, family medical history, name of your personal hospital among others. Be rest assured that the insurance company will contact your hospital to get details about your health history. The Proposal Form must be completed truthfully otherwise your beneficiaries may not be able to make a claim for death benefit. If you are over a certain age or you have an history of a terminal illness, then the Insurance Company will ask you to take a medical examination.
What is a Life Insurance Quote?
Quotes are price quotations of the total amount you will pay as premium to an Insurance Company for a Life Insurance Policy. Typically, it is always better to get a Life Insurance quote before applying to an Insurance Company. This will enable you to choose the cheapest Insurance policy that can be available to you.
What are the factors that will affect the amount paid as premium in Ireland?
There are certain factors that will most likely affect the amount you pay as Insurance Premium. They include:
The older you are, the higher the premium you will have to pay. Naturally, the risk of death increases as a person ages.
The premium for smokers may be as much as double the premium of a non-smokers. Smoking is an habit that increases the probability of death.
(iii) Current and Past Health history:
Health history will also play a fundamental role in determining how much premium an insured person will pay. If the health of an insured person is poor, then the higher the premium.
(iv) Work and Lifestyle:
Work and Lifestyle habits will also determine the premium of an insured person. The premium of an Insured Person will be higher if the work and lifestyle increases the likelihood of death.
Who gets the death benefits:
Typically benefits are paid when the insured person dies. The benefit is paid to whosoever is listed as the beneficiary of the insured person upon the Insurance company receiving a certified true copy of the death certificate of the deceased person. In Ireland, the process of receiving the death benefits of an insured person is by filing of a claim. The Claim will usually include the name of the insured deceased person, the date of death, the date of birth of the insured, the relationship between the beneficiary who is filing the claim and the deceased, name, address and contact information of the named beneficiary filing the claim among other information.