How to Choose Life Insurance – 8 Simple Steps

how to choose life insurance ireland

When searching for a life insurance plan, you may become puzzled by all the different types of life insurance available to you on the market.

Here we gather all the essential information you need in order to choose life insurance that suits you and your family best!

how to choose life insurance ireland

Step 1: Understand what life insurance is

Life insurance is a contract between an insurance policyholder and an insurer, where the insurer promises to pay a designated beneficiary a lump sum in exchange for a premium upon the death of the insured person.

Depending on the contract, terminal or critical illnesses may also trigger the payment.

The policyholder pays a premium, either on a regular basis or as one lump sum. Other expenses such as funeral costs can also be included in the benefits.

Life insurance contracts fall into two categories; protection policies and investment policies.

Protection policies are designed to provide a benefit (lump sum payment) in the event of a specified occurrence such as death. This is the most common type of life insurance in Europe.

Investment policies, in contrast, assist with the growth of capital of the insured person as they can choose to invest their money in various funds. These are most common in the USA and the types of policies available are whole life, variable life and universal life cover.

Step 2: Decide if you need life insurance

If you are over 18 with a steady income, a mortgage or children, than you definitely need to consider life insurance.

If you do not earn a significant percentage of your family’s income, then you may not need life insurance.

It is mainly parents and those with significant income or mortgages who need to choose life insurance.

This will offer essential protection for your children or other family members should you become seriously ill or pass away.

Step 3: Become familiar with the life insurance providers in Ireland

There are 6 main life insurance providers in Ireland:

* Irish Life;

* New Ireland;

* Aviva;

* Friends First;

* Zurich Life;

* Royal London.

At first, all of the companies may seem to be very similar in terms of their offerings. But there are some key differences that you should be aware of before you choose life insurance and the provider.

For example, Aviva has a maximum age limit of 84 for the expiry of life insurance, while with Friends First and New Ireland the maximum age limit for expiry is 64.

It can be quite tiresome and difficult to understand the real differences between each provider, and even more complex to choose life insurance that offers the best protection for the best price.

This is why many people will contact an insurance broker, bank or other Third Party to assist them in finding the best policy.

Step 4: Select who to help you choose life insurance

There are many different providers of life insurance available in Ireland. These include:

* Insurance brokers;

* Life insurance brokers;

* Banks.

Depending on who you turn to for help when you need to choose life insurance, you could receive varying advice, information and prices as a result.

It is important to understand the positions of each agent so that you know what they are trying to achieve.

An insurance broker will try to sell you the life insurance that their company offers, and will not consider alternative options for you.

They may try to overcharge you if you are already a customer of theirs and they believe that you will be easily convinced.

By going through an independent life insurance broker, you can receive an unbiased opinion on which life insurance policy is best suited to you.

They can find the best deals available to you and ultimately save you money and time spent searching for the best value.

The banks in Ireland can only sell you policies from one insurer. If you go to Bank of Ireland, they will sell you their own life insurance policy, while other Irish banks will sell you a policy from Irish Life.

Ultimately, it is always better to consider all options in order to choose life insurance that is superior in quality and cheaper in cost. Therefore, Third Party assistance can be hugely advantageous.

Step 5: Calculate how much life insurance you need

You may choose to use an online life insurance calculator tool that can effectively estimate the value of life insurance that you require.

Or, alternatively, you may ask an insurance broker or bank to help you more precisely calculate how much life insurance cover you need.

In general, the rule of thumb is to find a policy that is worth 5-10 times your annual salary. However, this will vary depending on how much debt you have or how many dependents you have.

Be careful to not accept a level of cover that is unnecessarily high.

Shop around and seek advice from more than one source in order to figure out what is most realistic for you. An informed shopper is a wise shopper!

Step 6: Choose a life insurance plan that suits you

The main policies are life insurance, mortgage protection and income protection. Within the life insurance category, there are different types including whole life cover, variable life cover and universal life cover.

Life insurance ensures that your financial dependents will receive income if you pass away in order to replace your income. This is absolutely essentially for working parents with children under 18 especially.

Although it is a horrible thought, tragedies can happen and so we must prepare for the worst but hope for the best.

Life insurance protection policies are seen as a very safe way to protect the money you wish to provide to your dependents after death or serious illness.

However, you may be interested in the alternative that is a life insurance investment policy.

Here are some quick descriptions on the different types of life insurance investment policies to keep in mind when you choose life insurance:

Whole life insurance offers both a death benefit and cash value in the case of death. It is the most comprehensive and expensive type of life insurance.

In traditional whole life insurance policies, premiums remain the same until you’ve paid off the policy. High commission levels and fees from the insurance broker mean that a lot of the money you pay goes directly to the insurance agent. Therefore it is important to be aware of this if choosing a whole life insurance policy.

Variable life insurance is a form of permanent life insurance that builds up a cash reserve that you can invest in any of the choices offered by your insurance company. Hence, the value of your life insurance fund may go up or down depending on how these investments are doing.

A universal life insurance policy is a different kind of permanent life insurance that uses part of your accumulated earnings to cover some of the premium costs.

You may also choose to vary the amount of the death benefit. As it offers extra flexibility, there will be some higher fees than with variable life insurance.

Experts often recommend that those under 40 years old, without a family disposition for a critical illness, should choose a term insurance policy that offers a death benefit only. However, you can choose to add on different cash values or conditions as you require.

Mortgage protection is another basic cover that everyone with a mortgage must-have. It means that your mortgage will be cleared if you die, avoiding huge masses of debt being placed on your family should you not be protected.

Income protection is similarly as important. If you become ill and cannot work, you will receive 75% of your income for a number of weeks out of work. This usually covers you for any illness and is definitely something to insure is included in your cover.

Ideally, you will be covered with life insurance, mortgage protection and income protection. It’s up to you, but wouldn’t you rather have total peace of mind should something terrible happen to you or your loved ones?

Such insurance protection will guarantee that you will have the financial support you need whatever happens. This is why it is important to choose life insurance that is comprehensive and complete.

Although you may choose to save money on other areas of your life, life insurance is definitely not one of the areas that it is okay to skimp on.

However, there is a difference between spending a lot of money on life insurance and having high-quality life insurance. See below regarding insurance discounts to see more.

Step 7: Other factors to bear in mind

Health issues

When you first receive your quotes, these quotes will have assumed that you are in perfect health. If you have or have previously had any health conditions, you are obliged to disclose these to the life insurance provider.

Although having health conditions will increase your life insurance quotes, you will find yourself stuck later on if you were not honest to your life insurance provider. Therefore, honesty is essential from the very start when looking to choose life insurance that will support you in the long run.


Keep an eye or ear out for any new discounts available on the market. The smaller life insurance providers, in particular, are prone to advertising offers and discounts in order to compete with the bigger, more dominant providers.

These discounts can be a great way of saving money on your life insurance policy, without reducing the quality of your policy.

Step 8: Choose life insurance with Ucompare

Ucompare is an unbiased insurance provider offering travel insurance, car insurance, and now life insurance policies.

Ucompare is an insurance comparison tool that searches the market in order to find the best quotes for you and your family.

As Ucompare considers the best value life insurance policies available especially for you, you can be sure to save time and money in your search to choose life insurance that will keep your mind at ease.

Try our life insurance comparison tool here and see how much money you can save.

Also, have a look at the detailed article on What Questions to Ask When Buying Life Insurance?


JAD Marketing Ltd. trading as Ucompare is regulated by the Central Bank of Ireland.





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