A survey commissioned by Caledonian Life, looking at the financial consequences of the death of a family’s primary earner, found that most people have a realistic perception of the amount of Life Cover they would need to ensure that their family’s financial needs could continue to be met. Shockingly however, many appear to be far from prepared financially should such a terrible event occur.
Having sent these facts to the Irish media, extensive press coverage was received, highlighting more than ever the need for Broker advice in Ireland. For example, more than 54% of those surveyed believe that the surviving family would need a lump sum of between 10 and 15 times their current annual income to maintain their family’s lifestyle. Despite this fact, people knowing what cover they should have – the reality is often far removed from that.
In reality, the average Life Cover policy is said to be under €300,000. For someone earning an average industrial wage of just over €35,000, this level of cover would only cover their family for close to 7 years. Even more, for a professional earning €70,000 each year this level of cover would only support their family for just over 4 years, a very short period of time.
Some other findings from the survey offered up even more apparent contradictions. When asked about their own personal circumstances, 74% believe that their family would be well provided for or just have to ‘tighten their belts’ slightly – even though, as we have just illustrated, the same results uncovered that in reality people have insufficient cover in place, making the thought of your family being well provided for very unrealistic.
As experts in the field, you will be more than aware that there are a variety of reasons as to why people do not have sufficient Life Cover in place – often relating to a persons perception of the affordability of Life Cover. Alternatively, Life Cover may not be something an individual has prioritised or discussed with their Broker.
This of course represents a significant prospect for the Broker’s of Ireland, as the demographic surveyed have awareness of the benefits but have yet to take action when it comes to arranging Life Cover. This, partnered with the historically low Life Cover rates available today, makes it an opportunity not to be missed!
Perhaps the public could do with being further reminded of the following 3 golden rules which we have emphasised in all of our recent press releases;
1. Don’t undervalue the Stay-at-Home parent
Our recent household cost survey uncovered that the average stay-at-home parent’s basic household duties can be valued at €59,000 per year. Their role can be significantly undervalued, and as a result, the death of a stay-at-home parent can have significant financial consequences. In some instances, no Life Cover was in place for the stay-at-home parent, making the prospect of their death even more shocking. This, coupled with the fact that Ireland is currently experiencing a Baby Boom having one of the highest birth rates in the EU, makes this a dangerous trend for young families.
2. Don’t presume that the level of Life Cover needed increases with age
Many people inaccurately predict that their Life Cover needs will increase as they get older. As you know, this is far from the reality. A couple in their 30s with a young family have greater expenses and dependencies than a couple approaching retirement with adult children who are no longer financially dependent upon them, and therefore making their need for sufficient Life Cover far more pressing.
3. Their is a huge selection of Life Cover to choose from, and great value currently available in the market
As you know, Life Cover has decreased in price over the last decade, with significant savings worth thousand’s of Euro available to the Irish public. This important fact can be overlooked in these financially challenging times, but consumers are urged to research the options available to them with their Broker, who can advise on the most suitable levels of cover. This need for Broker advice is a consistent message in our press releases circulated to the Irish media.