IF YOU have a young family, life is full of joy but also full of responsibility and costs, writes financial advisor Darach Honan. It’s likely you have to pay a mortgage or rent on a family sized home. You have a family to feed, dress and send to school. And you have numerous utility bills. If something unexpected were to happen, would you have enough savings to continue to provide for your family?
Imagine for a minute that you were seriously injured or suddenly fell ill. Generally, there is a considerable physical and psychological impact on the person who is diagnosed with a serious illness, which naturally impacts their family. But equally there is a considerable financial burden that must be shouldered at the same time as managing the medical and psychological issues.
The Irish Cancer Society carried out research into the financial burden patients and families find themselves in when diagnosed with cancer and when undergoing treatment. The research entitled ‘The Real Cost of Cancer’ found that the average cost to the patient and their family per month is approximately €756, rising to €1,000 a month in some cases, even for patients with a medical card or private health insurance*. This does not consider that those who can’t work or are forced to work less, face a considerable drop in income.
So in addition to the medical and psychological strain of having a serious illness, patients are often expected to carry the financial burden too. Although none of us want to think about it, it is worth considering whether you have enough savings to fall back on should something happen. You could be faced with an extended period out of the workforce as well as significant out of pocket medical expenses. If the unthinkable happened and you were no longer there to provide for your family, how would they cope financially? Would they need to sell the house, move and change schools?
Thankfully, with serious illness cover, a little goes a long way. Think about it like this, if you needed €2,500 a month to live off, that would mean you’d need €30,000 a year to cover bills and household expenses. The good news is that cover is not expensive, and premiums start from as little as €10 per month.
The important thing is that you don’t put getting life cover on the long finger. The longer you leave it the more it may cost you. The table below shows how far even a small amount of cover could go and the monthly cost.
| Age Next | Premium for €100k Life Cover (per month) | Premium for €100k Life Cover + €10k Cancer Cover (per month) | Premium for €30k Serious Illness Cover (per month) |
| 35 | €9.90 | €10.96 | €13.56 |
| 40 | €11.87 | €14.61 | €18.54 |
| 45 | €16.99 | €21.29 | €26.20 |
| 50 | €26.07 | €32.82 | €37.95 |
| Source: Zurich Life November 2019. Premiums quoted for non-smoker rates over a 20 year term. Subject to underwriting. Insurance Levy: A government insurance levy (currently 1% as at November 2019 and may change in the future) applies to this policy. These sample premiums do not include the levy. | |||
A life insurance plan can cost considerably less than you think. You could be surprised at how cheap life protection can be. When choosing a plan there is a wide variety of options. Whether it’s cancer cover, serious illness protection or life insurance, there is a plan there to suit you. Talk to your financial advisor in order to find a suitable plan.
Darach Honan is a financial advisor with IPS Financial Advice Ltd in Limerick. Contact Darach on darach@ipsfa.ie or call 087 1277155.
