Thursday, 26 September 2019 13:34

Importance of Life cover for families

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The importance of life cover in financial planning for families.

I have been a financial advisor and business owner for almost 20 years and for the first time since I set up in business, I am starting to see several of my clients and personal friends pass away or develop a Serious Illness. While away recently I got news that a client of mine, who had only been in with me recently had passed away suddenly. He left behind a wife and 2 young children. He had a good level of life cover in place on himself but as an advisor did I recommend enough life cover?

It has forced me to rethink my attitude to the importance of life cover and serious illness cover when I am meeting my clients and putting together a financial plan for them. I have always recommended life and serious illness cover to my clients, but it is now going to be one of the first areas that I discuss, and I will be recommending higher levels of cover.

Most people have mortgage protection cover which generally covers the outstanding balance on their mortgage, so that in the event of death the mortgage is cleared. This policy is generally assigned to the relevant lending institution so the mortgage is cleared first and if there is any additional cover this will be paid to the surviving partner.

We would always recommend that our clients put in place a separate life policy and the proceeds of this policy are paid to the surviving spouse/partner or to the Estate.

There are several factors that we consider when recommending the level of life cover and the term of the policy to our clients;

  • Current level of earnings, we generally recommend life cover of between 8-10-times earnings.
  • Level of debt, mortgage and other debt, the mortgage on the family home is generally covered by a mortgage protection policy but are there other mortgages/loans that are not covered by a life policy.
  • Number of children and their ages, the younger the children are, the longer the term of the policy that we would recommend.
  • Affordability, we are obviously very aware of how much people can afford and take this into account when going through various options, it might be a case of reducing the term of the policy rather than reducing the level of cover.    
  • What people need to consider when taking out life cover is, what would be the financial impact for your family in the event of your death? Would your surviving spouse be able to maintain the lifestyle and future costs of your children?

    Examples of some life cover costings, these quotations are based on both people being non-smokers and for a term of 10 years

  • Dual life cover of €500,000 both spouses aged 30 next birthday, cost is €32.30 pm
  • Dual life cover of €500,000 both spouses aged 40 next birthday, cost is €56.33 pm
  • Dual life cover of €500,000 both spouses age 50 next birthday, cost is €119 per month
  • For more information and advice on life cover for families contact Colm Kelly 01 8700370 or email    

    Last modified on Monday, 21 October 2019 14:42
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    About Cregan Kelly O'Brien


    In 2007 Maurice Cregan and Colm Kelly established CK Financial Services to provide financial planning and advice to business owners and individuals. Tommy O'Brien, a General Insurance expert, then joined them in 2010, enabling them to meet the full financial needs of their clients. Financial Life & Planning Limited would deliver Financial Services, and O'Brien Cregan Kelly Insurances would deliver Insurance Broking services. Two Business Names were registered Cregan Kelly O'Brien Financial Planning and Cregan Kelly O'Brien Insurances

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