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The Financial Column

Welcome to the Financial Column in association with Moneyplus, Bridge Street, Boyle.

Q. I have a Life Insurance Policy which I took out about 15 years ago.  It is a whole of life Policy. The cost is going up each year and I fear that I will not be able to afford it for much longer.  I need some level of life cover.   What can I do now ?

A. One of the advantages Whole of Life policy is that there is the certainty that the sum assured will be paid to your estate on your death, provided the premiums are paid up to date. However, one of the downsides of this type of life policy is that as you get older the policy may be reviewed which may result in the premiums increasing. This appears to be situation with your policy. The terms and conditions of your policy will set out when reviews may take place – depending on your policy it may be reviewed annually, or in some policies, every 5 years. As the premiums can rise substantially, they may become unaffordable.

Level term life cover
It would be important to review this life cover in the context of your overall personal financial circumstances to see what life cover is appropriate for you and particularly for what term. For example, if you have the life cover for family protection reasons, say until your youngest child reaches 21 or 25 years of age, it may be more appropriate and affordable to have level term life cover to cover the time remaining until they reach this age. The advantage of a level term life policy is that the premiums are guaranteed and will remain the same for the term of the policy.

A similar approach would be recommended if the purpose of the existing policy was to protect existing borrowings – a level term life policy for the remaining term would be more affordable and the premiums would be guaranteed.

You should consult an independent financial adviser like Money Plus before making a decision to cancel or change your existing life cover to ensure you get the most suitable advice for your specific circumstances.

If you have any financial questions you would like answered in this column please submit details in confidence to [email protected]

Money Plus are experienced investment and financial brokers and have been in the business of financial and investment planning for many years.  They are dedicated in providing bespoke financial planning advice to clients. If you would like further advice on the above or any other financial information please contact Belinda McCauley in our Boyle office on Bridge Street on 071 9194000 or [email protected]

 Boyletoday.com/MoneyPlus accept no responsibility for any decisions taken as a result of advice provided in this column.   A reliable recommendation can only be made following a full detailed consultation taking an individual particular circumstances into consideration

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