Q&A on Life Insurance
Question– I am 40 years old earning €800 a week with three kids – the youngest of whom is five – and a stay-at-home partner. I want to take out life insurance to protect us financially, but how much life cover do we need?
Answer– It looks like your partner and your children are financially wholly reliant on your income and will be for many years to come. So ideally, you would consider insuring your life for your annual income (€41,600) multiplied by the number of years until your youngest is financially independent, according to Richard Cox, who is head of contact centre and operations at Peopl Insurance.
So, given the youngest is five-years-old and anticipating them going to college, that would be 17 years, he said. Ideally you would be looking at about €700,000 worth of life cover, costing approximately €65.51 a month, assuming that you are a non-smoker. However, even having €250,000 worth of life cover would make a huge difference should anything happen to you. Mr Cox said this would cost in the region of €26.75 a month.
It’s important to set a level of cover that you won’t struggle to pay each month, he said. This is because life insurance should provide you with peace of mind, and not be a source of worry. At the end of the day, a little life cover is far better than none, the Peopl Insurance executive said.