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Case Study 3 – Young couple inadequate protection in place for death/illness

Client:- Couple late 30’s, self-employed combined income €80,000, 3 young children, own home with mortgage. Home purchased by husband early 2002, mortgage protection in place for husband only. No life cover on spouse and neither have serious illness cover.

Primary concern with three small children, adequate protection for family in event of death or serious illness.

Planning/Advice

We assessed suitable life cover for debt and replacement income term assurance and serious illness cover in the event of either spouse’s death or serious illness. The couple had a budget of €150 per month and while the recommended level of cover cost in excess of the budget, we advised and provided options for suitable levels of cover for both lives within budget.The budget presented a challenge to provide a suitable level of cover. In these situations though the amount of cover and age/health of applicants are significant cost factors, there is flexibility over options which can keep cost down.

We considered the following:

  1. Shorter term with a convertible option to extend term.
  2. Weighed up the different earning powers of each spouse and advised on dual life cover, i.e. different amounts of cover for each. Life 1 €350,000 Life & €150,000 specified illness. Life 2 €100,000 Life & €50,000 specified illness.
  3. Accelerated serious illness cover rather than stand alone

Solution: Dual Life and specified illness cover 20 year term with convertible option on an accelerated basis keeping cost down. The convertible option is flexibility that does cost extra.

We arranged dual cover for both within budget resulting in family being better protected.

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