Protection

At John F. Loughrey Financial Services, we want to protect the most important thing to you – be that your family, your home, your health or your business. Here are some of the products we offer:

Personal Life Cover pays out a benefit in the event of the death of the life assured. It will normally be taken out to either cover debts or provide for dependents in unforeseen circumstances. It can be taken out on a Single Life Basis, Joint Life Basis or Dual Life Basis. A Single Life policy is where only one person is covered. Joint and Dual Life policies both offer cover on 2 people, the difference being that a Joint Life policy will only pay out once, usually on first death unless otherwise specified, whereas a Dual Life policy provides independent cover for each of the individuals so there is essentially double cover. The cost of Life Cover is based on your age, your smoker status and your health.

The following are types of Life Cover:

Decreasing Term Assurance

Also known as Mortgage Protection this type of policy is generally only taken out in conjunction with a Capital and Interest Mortgage. It is initially taken out for a specified term and amount. As the name suggests the amount of cover decreases in line with your mortgage balance. This is the most basic and usually the cheapest type of cover you can get.

Level Term Assurance

This policy is for a set term and a set amount and again the name describes the type of cover in that it stays level throughout the term, rather than decreasing like the policy above. You can also choose to add indexation to this policy, which means that the benefit and premium would be increased by a set amount each year in order to counteract the effects of inflation. If indexation is chosen at the beginning of a policy it can be stopped at any stage throughout. However, if it is not chosen to begin with it cannot be added at a later stage.

Convertible Term Assurance

This is essentially the same as a Level Term Assurance policy with an added benefit called a Conversion Option. This valuable benefit guarantees future insurability, as it allows you to convert the policy before the maturity date, without having to give any medical evidence. Therefore the Insurance company cannot increase your premium based on your medical history, the only factors they can take into account are your age and smoker status at the date you choose to convert.

Serious Illness Cover pays a benefit on the diagnosis of one of a list of Serious Illnesses covered under the policy. This valuable benefit can also be take out in the form of a Decreasing policy, a Level policy or a Convertible policy as outlined above. Serious Illness can be taken out on its own or it can be added to a Life policy in the following way:

Stand Alone

Stand Alone cover means that the benefit is independent of any Life Cover Benefit on the policy. So if you had €200,000 Life Cover and Stand Alone Serious Illness Cover of €100,000 an accepted claim on the Serious Illness benefit would not reduce the Life Cover on the policy therefore the €200,000 would still be payable on death within the term of the policy.

Accelerated

In the case of Accelerated Cover, an accepted claim would reduce the Life Cover benefit by the amount of the claim. So in the same example if your had €200,000 Life Cover but Accelerated Serious Illness Cover of €100,000, a pay out of the €100,000 Serious Illness benefit would reduce the Life Cover by this amount, leaving €100,000 Life Cover remaining.

Unlike Life Cover or Serious Illness Cover which both pay out lump sum benefits Income Protection pays you an income for as long as you are off work or until your reach your normal retirement age. This absence from work can be due to illness or injury. The maximum cover anyone can have is 75% of your salary less your Social Welfare entitlement. You can choose how soon after you go off work that the cover would commence. The least amount of time being 4 weeks and the maximum period being 52 weeks. The sick pay scheme operated by your company, as well as affordability will have a bearing on this. The shorter the deferred period you choose the more expensive the policy.

This type of policy can be taken out on a Personal Basis or on a Corporate Basis. With regard to Personal Cover the benefit is treated as income and therefore taxed at your marginal rate on payment. However this results in the premiums on an Income Protection policy receiving tax relief at your marginal rate of income tax making them quite affordable. Often employers may operate an Income Protection Scheme for employees.

This type of cover is becoming ever more popular given the decrease in thresholds over the last few years. There are substantial benefits and tax savings to be made surrounding this type of cover. An Inheritance Tax policy is expressly set up under Section 72 Capital Acquisitions Tax Consolidation Act 2003 (“Section 72”) and therefore the proceeds are exempt from tax as long as the sum assured is used to pay an inheritance tax liability. Any part of the proceeds not used in this way will be liable to inheritance tax.

These type of policies are used to protect a business from loss of profits and ensure it continues to run smoothly in the event of the death of a key employee or shareholder.

• Keyperson insurance is used to compensate the business if a key employee dies or takes ill. This benefit can be used by the business to hire a replacement member of staff or cover any loss in profits due to the absence of the employee for a period until alternative arrangements can be made.
• Partnership or Co Director insurance ensures there are available liquid funds to compensate the deceased Partner/Directors dependent's and essentially buy back their share in the business.

*examples are provided solely for illustration purposes.