One of the clearest statements I have received regarding the importance of having life cover was when my lecturer in college said – just like its mandatory to have third party cover when driving – life cover in much the same way should also be mandatory. Its true – the importance of life cover cannot be understated.
Married with Children.
What will happen to your family if you – the main bread winner – were to pass on and your family who are already emotionally shaken must deal with future household and educational costs such as college expenses etc.
Married without Children.
Even if you have no dependents – mortgages, bills and funeral costs will still have to be paid by someone.
Having life cover means peace of mind – plain and simple.
Approaching a broker is the first step to addressing this responsibility. A good broker will deal with a number of life companies and based on your age/health/lifestyle and if you are a smoker and the length of time you want to cover he/she can shop for the best deal possible. Your broker will also advise you on various strands of protection such as serious illness and income protection.
Pensions can be viewed as a form of security for those in the retirement phase of their life. A pension is basically a savings account that can be accessed at a certain age. On top of that there are tax breaks and returns as you invest later and later into your life. Generally speaking pensions are more dynamic than any other form of financial investment as funds can compound and grow with access to funds that have specialist managers.
The current situation for pension in Ireland however is quiet alarming. The state pension at the moment is about €240 per week – which is merely designed to keep you out of poverty rather than enjoying the remainder of your life. Worries about the guarantees for this pension are credible – at present there are €420,000 Irish people over 65 – however by 2049 this will be almost 2 million. This will put enormous pressure on the state coffers and may question its commitment to such pensions. 5 years ago there were 6 working people for each retired person – by 2050 there will be only be 1 for every retiree.
As a rule of thumb you should try and aim for 50% of your income for your pension – the sooner you start the better while you can get the ball rolling for about €25 per month.
Once again your broker will be able to advise you on the different pension categories and investing choices available to you – taking in diversification and your risk needs and financial goals as well as tax savings.