Ireland's Largest Pregnancy and Parenting Resource

Posts tagged ‘Money’

Huge Holiday Savings – 30% Discount!

We at Eumom felt the need to inform you of these great savings to be had on your family holiday this year.

Siblu are offering great value family holidays. Siblu holiday parcs are among the best in France, and they work with a range of hand-picked siblu selection parcs in France, Italy or Spain.

  (more…)

Financial Protection for Young Families

What have Kylie Minogue, Mr T, Lance Armstrong and Jade Goody have in common?

When you are starting a family it can be one of the most financially daunting periods of your life. The added responsibility to provide for your little one means you start to think about your finances in a whole different way.  Planning for the future becomes much more necessary than when it’s just the two of you going from one pay cheque to the next!

The first step in planning for the future is thinking about the unpleasant thought of what would happen if either you or your partner should pass away or suffer a serious illness.

Such a loss has a devastating emotional effect but think for a moment about the financial effect – how would your family continue to pay for their standard of living? What about future costs like education or weddings? Would they be left with debts to pay? Would they have to sell the family home to survive?

If it’s a serious illness you suffer, what about medical costs should you or your partner be unable to work and earn and income? You might qualify for Social Welfare disability payments, however, this is currently €204.30 per week (€10,623 per year). How long could you last on that?

If there was a simple, relatively cheap way of providing for your family – wouldn’t you do it?

The simple answer to these questions is to have an insurance policy to protect your family in the event of these things happening. Everyone insures their car just in case they have a crash – we all hope never to have to claim on a policy but it gives great peace of mind to have it!  Life assurance can provide your family members with the resources to maintain their lifestyle when you die or suffer a serious illness. It can replace some or all of your income. It also can pay off debts and cover funeral costs. It can even help fund longer-range needs like your children’s education.

Research from the Financial Regulator shows just 40% of Irish adults have some form of life cover.

  • 36% said they had no idea how they would cope financially if they or their partner suffered a serious illness
  • 33% said that the healthy partner would have to work two jobs
  • 27% said they would sell their home or downsize to cope

Already got mortgage life assurance?

Anyone with a mortgage will have mortgage protection life assurance in place – this type of policy is normally on a decreasing basis which means that over time as the mortgage is paid off, the amount of life assurance decreases too. Many mistakenly believe this is all the life cover they need. Yet if you think about it, all it does is clear your mortgage, it wouldn’t provide any income for your dependants to live on or clear any other debts you have.

When you have a family it is important for you both to have additional cover, separate to your mortgage protection. If one of you is a stay-at-home parent, he/she provides vital household services that would be expensive to replace eg childcare or running the household.

How much cover do I need?

The real question is how much do you think your family would need if you were gone? Is €100,000 enough? €200,000? It all depends.  Try working out how much money will my family need after my death to meet immediate expenses like funeral expenses and debts? How much money will my family need to maintain their standard of living over the long run?

It can be a pretty complicated exercise to come up with a figure and there is always the balancing of trying to match what you need with what you can afford. Just because you can’t afford the €500,000 cover you might need to maintain your current lifestyle doesn’t mean you shouldn’t put any cover in place! The best thing is to sit down with a professional adviser and work out the cover that fits into your budget.

Concerned about the cost?

Life assurance premiums are calculated based on your age, sex and medical history, it is generally cheaper to take out cover as early as possible in your life – don’t put it on the long finger as it will cost you more in the long run! The example below shows the difference in cost for insuring a female, non-smoker, aged 25, 30 and 35 – it nearly doubles!

Age 25 Age 30 Age 35
Life & Serious Illness Cover €100,000 €100,000 €100,000
Cost per month €19.17 €25.28 €34.72
Note:
Quotes are for Illustration Purposes Only. Illustration Dated 17/07/2009, premiums subject to change. These costs are subject to confirmation by the appropriate insurance company on acceptance of a completed application form.

Reviewing your cover

It is important to regularly review your cover as your circumstances change. You might be earning more, have more children or have paid off debts which no longer need to be covered. Life assurances prices and products also change so it is vital to review every couple of years to make sure you are still getting the best cover you can afford.

A final thought…

So, have you guessed what it is that Kylie Minogue, Mr T, Lance Armstrong and Jade Goody have in common?

They are all famous, relatively wealthy and have suffered a serious illness.

Below are some statistics to consider – sometimes its easy to think we’re invincible and illness won’t happen to us. Starting a family makes us see the world in a whole new way… It is so important to have the right amount of Life cover to protect your family’s standard of living. Speak to your partner TODAY to about your life cover and make sure your family is financially secure.

  • Irish Life paid out €16 million on 167 Life cover claims for accident related /unintended deaths in 2008
  • 45 of these were road traffic accidents.
  • 46% of all Life cover claims for claimants under 40 were results of accidents.
  • Irish Life paid a death benefit of over €200,000 as a result of a road traffic accident where the plan had been taken out less than 2 months previously.
  • Almost 1 in 4 of Irish Life death claims were on plans less than 5 years in force.
  • Almost 50% of death claims were as a result of malignant cancer.

Money MarkMoney Mark can be contacted directly on moneymark@mpis.ie if you have any questions about the above post or any other personal finance issues. Mark Hopkins is a Qualified Financial Adviser and his company Mortgage Pension Investment Services (www.mpis.ie) is regulated by the Financial Regulator.

Where there’s a will,…and where there isn’t…:

WillOver the next few weeks I’ll be posting about some of the most important financial concerns of being a parent. I’ll start with one of the simplest (and maybe even the cheapest) to organise: your will.

It’s amazing how few people have a will – some statistics I’ve read say that less than half of parents have a will. I have to admit that I only arranged ours recently, 2 years after the birth of our first!

The most basic definition of a will is a written document which sets out what you want to happen to your possession when you die. It also covers what you want to happen to any dependants, i.e. your children.

I think most people avoid making a will because it’s tough to think about your death in such a cold and practical way.  Selecting a guardian who will look after the children if you’re gone can be one of the hardest decisions to make. Of course no one can look after your kids like you can but what if you had to choose? In our house this led to a lot of debate!

Why make a will?

1. To protect your kids and your partner

If you and your partner have children under 18, and both of you die without a will, the court will decide who raises your children. The state courts and social services department usually choose the closest living relative, who may not be the person you would have chosen. There’s no guarantee who they will choose – it may even be a non-relative, someone the children don’t know!

2. To ensure your possessions are passed on the way you want – if you don’t have a will, the law can decide what happens!

The law has fairly rigid instructions on what happens your possessions – don’t assume that everything will pass to your spouse. This is particularly true if you aren’t married – the court mightn’t recognise their claim to an inheritance no matter how long you are together. The best way to ensure your children and partner are looked after the way you want is to write it out in a will!

3. To prevent conflict in your family.

Without your specific instructions, decisions about what happens with your assets or your possessions can lead to great conflict within your family. I’ve seen cases where siblings have fallen out and not spoken in over 30 years because when their parents died there was no will! Deciding what to do with the family home is always a flash point for conflict as there can be huge emotional attachment to the places we grow up.

4. You’re worth more than you think!

Ok so house prices have fallen, pensions are down and we’re all less well off than a few years ago but when you sit down and write it all out, you may be leaving more than you think!

If you have a mortgage, you most likely have life assurance which will clear it if you die – even if the value is down, the property is still probably worth a significant amount. A lot of people bought investment properties over the last 10 years, how much is this worth? Have you any other life assurance which will pay out? What about pensions or savings accounts? Family heirlooms and jewellery? Try writing a list and you’ll see it adds up quite quickly. You might need to talk to a tax advisor as inheritance tax can have a big effect on your estate. I’ve come across plenty of cases where people have been forced to take out a new mortgage to clear a tax bill!

There’s plenty of information available on Wills and how to make one – the Citizens Information site has a very clear guide. You’ll need to talk to your solicitor to make sure your will is done in the best way for your personal circumstances and ensure everything is in order.

So what’s stopping you? I urge you to make a will if not today, try this week or this month – your family will thank you for it!

Money MarkMoney Mark can be contacted directly on moneymark@mpis.ie if you have any questions about the above post or any other personal finance issues. Mark Hopkins is a Qualified Financial Adviser and his company Mortgage Pension Investment Services (www.mpis.ie) is regulated by the Financial Regulator.

New addition to Eumom blog team

Money MarkJust a quick post to say hi and introduce myself to the Eumom blog.

I’m Money Mark – also known as Dad to 2 year old bundle of energy Cian who will be a big brother very soon!

I’m a personal financial adviser – this means I help people organise their money and make the right decisions with their finances.  So, you can look forward to plenty of posts to the Eumom blog with tips on saving money, information on various financial topics and useful financial stuff for parents to look out for.  My areas of expertise include:

  • Budgeting
  • Life Assurance
  • Pensions
  • Saving & Investing
  • Mortgages
  • Health Insurance

Combining my experience as a qualified financial adviser and a parent, I’m on a mission to help the parents of Ireland take control of their family finances!

Any feedback is welcome, as are requests for posts about whatever personal finance topics interest you. You can contact me at moneymark@mpis.ie or by phone on 1890 88 20 61.

Money Mark can be contacted directly on moneymark@mpis.ie or 1890 88 20 61 if you have any questions about the above post or any other personal finance issues. Mark Hopkins is a Qualified Financial Adviser and his company Parksome Ltd t/a Mortgage Pension Investment Services (www.mpis.ie) is regulated by the Financial Regulator.

Tag Cloud