Three reasons why talking about death shouldn’t be spooky

It is only natural to prefer to shy away from scenarios in which they or their loved ones pass away unexpectedly. Yet, life insurance is not about the death of your clients, it is about the lives they’d leave behind and about what happens when they can no longer care for them. Providing a safety net for loved ones is not spooky but leaving them behind without life insurance may be.

Here are three reasons why life insurance, or protection in general, isn’t spooky. 

1. Life Insurance keeps a roof over your loved ones’ heads

If your client is a homeowner, they will normally have their mortgage loan protected with Mortgage Protection. This particular type of life insurance is critical when a homeowner dies before their mortgage has been paid off. The cover helps pay off the mortgage and allows the remaining family members to stay in their family home, even after one source of income disappears.

But life insurance is not only important for homeowners, renters pay for their housing too. We’ve seen a definite societal shift in Ireland whereby renting has become a much longer-term fact of life₁ – but you could argue that financial services haven’t kept pace with this change. For renters their ongoing rental costs are not protected with a Mortgage Protection type policy - If they die, their rent will remain the same for any remaining partner and/or family – in fact, their rental bill could become heavier to bear when the remaining partner is left alone to pay rent. Families may have to downsize their accommodation or move to a more affordable neighbourhood, which can put an extra emotional burden on a family during an already emotional time. And in the current housing crisis, it is certainly not a given that a family will even be able to find another, more affordable (rental) home. A life insurance policy, either Mortgage or Term, can provide a family the financial stability needed to stay in their homes.

2. Life Insurance protects your children’s future

Parents work hard to give their child(ren) a strong start in life. But what if one of the parents is suddenly no longer around due to illness or an accident? Not only do the children need a roof over their heads, and have their basic needs met, they will also need the financial stability to be able to prepare for their future.

When a household has savings, some clients may be able to cope for a while. But emergency funds or ‘rainy day’ savings pots that Irish households have vary substantially. Economically precarious households have less than a week’s worth of spending on essentials in liquid savings. Even more affluent households only have somewhere between 7- and 10-months’ worth at their disposal and around 1 in 6 households have no savings at all₂.

In August we shared the results of our annual ‘Cost of Education’ survey₃. Education can be costly as is shown in the table below:

Is your client looking to send their kids to a fee-paying secondary school? They will be looking at an additional average cost of tuition fees of €5,6923. And when your client wants their children to be able to live in student accommodation while in university, they may face an average annual cost of €16,538 per child₃.

Having adequate life insurance in place can give a family the financial security to give their children the opportunity to pursue their (educational) dreams.

3. Life insurance can help pay for the costs of end of life

Nothing in life comes for free. Unfortunately, death can be expensive as well. The last months of a person’s life can be accompanied by medical bills, nursing home bills and other household bills that may have increased in the last phase of life. This may mean that when a person dies, they may leave behind some unsecured bills. Debts owed are the responsibility of the estate and will be deducted from the inheritance. And may even exceed the inheritance.

The last bill to be paid is for the funeral. While funeral costs can vary greatly, depending on the last wishes of the deceased and on the choice of the family, the bill will usually include multiple zeros. Not all families can afford this, and some will get into debt to honour their loved one’s last wishes and give them a proper send-off.

Our Zurich Guaranteed Term Protection provides additional benefits that can help families immediately. Our Guaranteed Term policies offer Immediate payment of Funeral Expenses, an advanced payment of up to €10,000 to cover the cost of funeral expenses₄. Also included in the policy is a Terminal Illness Benefit. This means that a lump sum will be paid as an advance of the current life cover amount if a terminal illness is diagnosed, provided diagnosis occurs at least 12 months before the end of the policy term₄.

Some final thoughts

Not only does the premature death of a family member impact the family’s financial circumstances, but there may also be other situations where their earned income is impacted. When your client gets ill, they may be unable to work for a while. Income Protection helps enable your client to afford their housing bill and/or pay for their children’s education. In the unfortunate event of serious illness, families may face extra costs. A Serious Illness policy, or Cancer Cover policy can help them focus on their recovery instead of worrying about the incoming (medical) bills.

It’s always best to get insurance as soon as the protection need arises. The younger the life assured, the lower the contributions will be. Especially for young parents, these insurance policies are accessible solutions that allows them to secure financial stability for their families. It will always be better to buy insurance 5 years too early than one minute too late.

Sources:

₁ Central Statistics Office, Census 2022

₂ Central Bank of Ireland, Quarterly Bulletin 04 / October 2022

₃ Zurich Cost of Education Survey, 2023

₄ Please see the Policy Document for full details