Term life insurance covers you for a set period, such as 20 years, and pays nothing if you outlive it. Whole of life insurance covers you for as long as you keep paying, so it pays out whenever you die, and it usually costs more, the CCPC says. A Section 72 policy is a whole of life or term policy written to pay inheritance tax, and Revenue exempts its proceeds from that tax when the rules are met.
Term life cover
A term policy pays a lump sum to the person you name if you die during the term. The CCPC calls it one of the simplest forms of life insurance, and it costs less than whole of life. In its example, a €100,000 policy over 10 years pays out only if you die within those 10 years.
One published price: Laya Life offers life cover from €9 a month for €100,000 over 20 years, for a non-smoker aged 25, with a 10% online discount (checked 9 November 2026). Our guide to the cost of life insurance shows what moves that figure.
You choose the amount, the term and who is covered:
- Single cover insures one person.
- Joint cover insures two people and pays once, on the first death.
- Dual cover insures two people and pays if either dies.
Options you can add include serious illness cover, index-linking and a conversion option, which lets you change the policy before the term ends without a health check. Ask what each one adds to the price.
If you stop paying, the CCPC says a term policy lapses after 30 days. Some insurers let you restart it if you pay what you missed and sign a health declaration.
Whole of life cover
Whole of life cover lasts your lifetime, as long as premiums are paid. The CCPC says it costs more than term cover and the price can rise at regular intervals. Some policies include a savings element, where part of your premium goes into a fund.
The CCPC describes three types:
- Fixed premium whole of life. The premium and the benefit are set at the start. They change only if the policy is linked to inflation, and then both rise each year.
- Unit-linked. Your premium goes into a fund run by the insurer. The fund value can fall short of what is needed to keep the cover going for life.
- Section 72. Written to pay inheritance tax on your estate. More on this below.
For couples, there are more ways to set it up. Joint life, first death pays when the first person dies. Joint life, second death pays when the second person dies. Dual cover pays on each death.
Charges apply. The CCPC lists yearly charges for managing the fund and monthly charges for handling your premium. If you stop paying, the policy may not lapse at once: the insurer can keep taking charges from the fund until it is empty, then the cover ends.
The CCPC is clear that these are not savings plans. A cash withdrawal can reduce the death benefit, and the savings element exists to support the cover, not to grow your wealth.
Premium reviews
Unit-linked whole of life policies are reviewed, the CCPC says: typically after 10 years, then every 5 years, then every year after a certain age. If the fund has not kept up, you may have to pay more or accept a lower benefit.
The Central Bank's Consumer Protection Code covers any policy whose premium may be reviewed during the term (Regulation 337). Before you buy, the insurer or broker must explain the risk that the premium may rise and say how long the first premium is fixed. The application form must also carry this warning: "The Premium [may or will] increase after [the fixed period]."
Ask for any discount or loading in writing. Under Regulation 330, a quote must show its value in euro and as a percentage, and the premium you would pay without it.
Section 72 policies and inheritance tax
Inheritance tax, part of Capital Acquisitions Tax (CAT), is charged at 33% on the amount above your tax-free threshold. A spouse or civil partner pays no CAT. For gifts and inheritances from 7 October 2026, the thresholds are:
| Group | Who it covers (main cases) | Threshold |
|---|---|---|
| A | A child, including a stepchild or adopted child | €420,000 |
| B | A brother, sister, niece, nephew or grandchild | €44,000 |
| C | Anyone else, such as a cousin or friend | €22,000 |
In Revenue's example, Sarah dies on 7 October 2026 and leaves €450,000 to each of her two children. Each child pays CAT on €30,000 over the threshold: €9,900 at 33%.
Section 72 of the Capital Acquisitions Tax Consolidation Act 2003 exempts the proceeds of a qualifying policy from CAT, as far as they are used to pay the inheritance tax on your estate. Revenue's conditions include:
- the policy must be in a form Revenue approves, and must state that it is a Section 72 policy;
- an existing policy that was not taken out under Section 72 cannot be used;
- you, the insured person, pay annual premiums (monthly instalments of an annual premium are accepted);
- cover must be at least 8 times the annual premium, or 6 times if there is a medical, health or job loading;
- the inheritance must be taken no later than one year after the death.
Any part of the payout not used for the tax is treated as an inheritance and taxed. Spouses or civil partners can take out a joint policy that pays on the second death. Section 73 is a similar relief for tax on gifts you make in your lifetime, with a minimum term of 8 years.
Sources differ on two points. The CCPC lists Section 72 as a type of whole of life policy, while Revenue's manual says a term or endowment policy can also qualify. The CCPC says Section 72 premiums are not reviewed, but Revenue's rules allow for a review carried out by the insurer under the policy conditions. Ask the insurer whether your premium is fixed for life.
Matching the policy to the need
- Term cover ends on a set date, so it lines up with needs that end, such as a loan or children growing up. If a mortgage is the only debt, see mortgage protection insurance.
- Whole of life cover has no end date, so it pays out whenever you die. Check how often the premium can be reviewed.
- Section 72 is for a large estate, or heirs who could not pay the inheritance tax, the CCPC says. Cover passing only to a spouse or civil partner is already free of CAT.
You may not need either. The CCPC says term cover may not be needed, or less of it, if no one depends on your income, you have death-in-service benefit through work, your family is financially independent, or you have investments that could provide an income.
You can cancel a term or whole of life policy within 30 days for a refund, the CCPC says, though fees or charges may be taken off. For extras, see serious illness cover, and for the overview, our life insurance guide.
Sources
- CCPC: Life insurance (accessed 9 November 2026)
- CCPC: Whole of life insurance (accessed 9 November 2026)
- Central Bank of Ireland: Consumer Protection Code, Part 4 Insurance (Regulations 330 and 337) (accessed 9 November 2026)
- Revenue: CAT Manual, Sections 72 and 73, Relief in respect of certain policies of insurance, September 2025 (accessed 9 November 2026)
- Revenue: CAT group thresholds, published 7 October 2026 (accessed 9 November 2026)
- Revenue: CAT groups (accessed 9 November 2026)
- Revenue: CAT rates (accessed 9 November 2026)
- Laya Life: published term life price (checked 9 November 2026)
General information, not financial advice. Prices and rules change: check the details with the insurer before you buy.