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Put simply, it’s an insurance policy that pays out a set sum if you were to die while it’s in force. Its aim is to provide financial support to those you leave behind, to prevent the loss of your income from causing a money crisis. 

‘Level term’ is the simplest type of life insurance and the name tells you all you need to know…

• Level: When you take out a policy, you determine how much you’d need it to pay out, eg €200,000. This remains ‘level’ – meaning it’s fixed at that amount – for the duration of the policy.
• Term: You choose how many years you’d want the policy to cover you for, eg 25 years. You usually can’t remain covered past the age of 80, though this maximum age does vary by provider. 

The more cover you get and the longer the term you want, the more it costs. You pay via a monthly premium which continues until the policy either pays out (if you were to die during the term) or the term ends.  

This is something every parent, partner, or person with any other type of dependant needs to consider. If anyone relies on your income and would struggle without you around, a life-insurance policy can be a cheap way to ensure they have a financial lifeline when you’re gone.

Ultimately, you don’t need to have life insurance cover, though, so you’ll need to weigh up whether the monthly cost is worth it for you. To help, here are some key points to consider:

• If you don’t have dependants, you don’t need life insurance. 
  
  If there’s no one you’d want the money to go to, don’t bother. Equally, if you do have dependants but there would be little financial impact if you died, then you still might not need a policy. But if paying the bills, the mortgage, bringing up kids, food shopping and more would be a struggle, life insurance is a cheap way to solve that.
  
  
• Check if you’ve any cover with your employer – though don’t just rely on that. 
  
  If you’re employed, you might benefit from free ‘death-in-service’ cover. This pays out a multiple of your salary, typically around four times, while you are an employee of that company.
  
  The death doesn’t need to occur at work or be linked to your job, but it’s not usually a good idea to rely on this cover as your only protection. If you were to change jobs or be made redundant, your next employer might not offer it. Plus, if you’ve had any significant health problems in the interim, you may find it expensive to arrange your own cover. 

If you do need life insurance, it’s best to buy it sooner rather than later – it’s more expensive the older you get. Even though the term will usually be longer, younger people normally have much cheaper premiums, so save more overall.

This is a common add-on to life insurance policies, though you can also get standalone policies. We’re not big fans of critical illness insurance as many believe they will pay out if you get ANY serious illness and can’t work.

Yet that isn’t true – critical or serious illness policies pay out a lump sum if you get a specific illness as defined by the terms of the policy; for example losing one leg isn’t critical, but two legs is. So don’t think “I’m covered for cancer”; as most policies only cover a limited range of cancers.

Picking a good critical or serious illness policy would take a doctor and financial nerd combined, so one option is to get level-term cover and a separate income protection policy – which protects your income from a range of eventualities.

As a level-term policy only pays a fixed amount on death (and there’s usually little dispute over whether someone is dead or not), then providing the company is reputable, it’s just a case of the cheaper the policy, the better. 

However, The rule of thumb is you should get quotes from many providers. Yet unlike other insurances – such as a car or home, the cheapest prices are not usually on the standard comparison sites. You’ll generally find the cheapest quotes by going to a broker or comparing them on our website.