Irish Life Assurance, Ireland’s largest life insurer, recently published figures showing that it paid out €1 billion to over 30,000 families in the last five years.
Death is often unexpected – which confirms the importance of life assurance protection for you and your family. To put this into perspective – Irish Life paid a death claim benefit for €377,000 as a result of a road traffic accident last year, where the plan had been taken out less than 7 months previously. Last year alone, they paid out more than €15.2 million on 141 life cover claims that were as a result of accidental or “unintended” deaths.
Accidents or unexpected deaths account for 50% of all death claims for persons under 40. The average person under 40 usually has a large mortgage and pre-teen children. If death is sudden, it stands to reason that a very significant financial burden results.
The average death claim paid in 2010 was €65,000. If this was invested in a deposit account with 3% interest, for 35 years less DIRT tax at 30% and with no remaining capital at the end of the 35 years – it would only provide a weekly income of about €50.95
If a 40 year old person earning the national average wage of €35,743 p.a. died, his/her family would need a life assurance lump sum of approximately €877,000 to invest to replace the income of €35,743 a year (based on €877,000 being placed in a deposit account assuming 3% interest p.a. for 35 years- subject to DIRT tax at 30% and with no remaining capital at the end of the 35 years).
When most people take out life cover they usually expect that it will be years, even decades before their families may have to make a claim. In 2010 almost 1 in 4 death claims were on plans that were in place for less than 5 years. . 24% of Irish Life death claims in 2010 were for lives aged below 50.
Dublin had the most death claims at 441 – Waterford had 34 and the lowest claims came from Longford, Roscommon and Laois with 7 claims each.