Saving for retirement is extremely important. People are living longer and leading more active lives in retirement. As a result it is more important than ever for you to think about where your income will come from when you retire. Pension saving is one of the few areas where you can still get tax relief and with the cost of living, will the State Old Age Pension be enough to provide you with an adequate lifestyle?
About half of the people working in Ireland are members of pension arrangements but with auto enrolment soon becoming a reality, all of us will now be saving for our retirement. It is imperative that you review the options available to you and how auto-enrolment will impact you.
What is Mortgage Protection?
This is also known as life cover for your mortgage. It is a form of assurance that is designed to pay off the outstanding amount of your mortgage should you or your partner die during the term of the loan and will be required by your bank as a condition of the mortgage loan. The amount of cover reduces each year, in line with your mortgage as you pay it off, assuming interest rates do not go over a defined level, typically 6 – 9% per annum and your repayments are kept up to date. The monthly or annual premium is fixed through the term of the policy. Mortgage protection is cheaper than standard term assurance because the level of life cover reduces over the term of the policy.
What is Income Protection?
Income Protection pays you an income if you are unable to work due to any illness, injury, accident or disability. You simply pay a premium every month, based on factors such as your occupation, health etc., that will ensure you receive a regular income if you are unfortunate enough to be out of work. This income will be paid right up to when you return to work or reach retirement age, whichever comes first. This protection product is much more comprehensive than serious illness cover, so therefore acceptance under this plan can be difficult in some circumstances and not all occupations are covered. Notwithstanding this, it must be a priority particularly for self employed professionals.
What is specified illness cover/serious illness cover/Critical illness cover?
This cover pays you a lump sum if you are diagnosed as suffering from one of a number of specified severe illnesses. This lump sum could be used to pay off or pay down your mortgage or might be invested to provide you with an income for the future. The more common illnesses are: