Pension and general financial advice

Brendan Burgess said:
What you mean is that you disagree with it. You are wedded to the life industry propaganda that everyone must be fully insured for everything that might possibly happen.

I think it's important to challenge this and not to insure against risks which are low and which can be easily handled if they do happen.

Their combined income is €12k a month
Their expenditure appears to be about €5k - don't forget that they have no mortgage on either property.
They are both working.
If one dies suddenly and the other quits work, they will have 100 months of expenditure - about 8 years.
And they clearly have wealthy family who would advance some of the gifts if they were needed.

It's absolutely clear to me that their wealth is their life insurance.

Brendan
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Not at all Brendan. When I talk to clients about life cover, I emphasise that the event may not happen. But it does happen.

The OP spoke of inheritance as he neared retirement, presumably as parents age and die. His need for cover is now, when he has 3.5 young kids. Will his wife be able to work with 4 kids? What if something happened to her? Would he be able to carry on working at the same capacity with 4 young kids? Even 8 years expenditure is not enough. The surviving spouse has exhausted their assets but the expenditure hasn't stopped.

Insuring this risk is a prudent thing to do. Otherwise you are asking the wealthy family to take on the risk.
 
OK, so this is the risk that you are insuring against.

1) That a healthy 37 year old dies suddenly and soon.
2) That after ten years of living off their investments, his family refuses to help out their daughter in law and their grandchildren.

Sure it could happen. But it is vanishingly unlikely.

He absolutely does not need insurance against it.

Brendan
 
_OkGo_ said:
If the €4m inheritance is from the OP's parents, then the spouse can forget about ever remarrying or doing anything that would jeopardize that relationship so it can't be relied on. The spouse would struggle to give the children a 3rd level education
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Well if she remarries presumably the new husband will have an income.

Or we will add that to the list

1) That a healthy 37 year old dies suddenly and soon.
2) She remarries a penniless husband who depends on her financially
So
3) That after ten years of living off their investments, his family refuses to help out their daughter in law and their grandchildren.
 
thedaddyman said:
Start with the obvious stuff and make sure you have wills squared away, done a full tax review to ensure you have claimed for everything and that you are set up in the most tax efficient manner possible and have claimed historically for everything you can.

Worth you wife just confirming her private sector pension position so you are clear. Also have you ever worked overseas or in the UK (see the posts on the UK state pension on here)

Are there any big spends coming up, anything you need to do to your own house, cars that need changing etc.

Given the great position you are in, I'd be focussed now, whilst you and the kids are young, on long term investment options for College in 15 or so years times
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Thanks for your comments thedaddyman,

no will made but I presume all my assets will automatically go to wife if I died?

I've worked overseas but unfortunately not long enough for a pension anywhere, always <2 years.

There are not any real big spends coming up at the moment although I'm sure my wife could find a way to use 100k in the house somewhere if she put her mind to it!
 
Brendan Burgess said:
What you mean is that you disagree with it. You are wedded to the life industry propaganda that everyone must be fully insured for everything that might possibly happen.

I think it's important to challenge this and not to insure against risks which are low and which can be easily handled if they do happen.

Their combined income is €12k a month
Their expenditure appears to be about €5k - don't forget that they have no mortgage on either property.
They are both working.
If one dies suddenly and the other quits work, they will have 100 months of expenditure - about 8 years.
And they clearly have wealthy family who would advance some of the gifts if they were needed.

It's absolutely clear to me that their wealth is their life insurance.

Brendan
Click to expand...

“If I had my way, I would write the word ‘insure’ over every door of every cottage and upon the blotting pad of every public man, because I am convinced that, for sacrifice that are conceivably small, families can be secured against catastrophes which otherwise would smash them forever.”​

— Winston Churchill
 
Was Winston Churchill a CFP a TEP an APFS a QFA or an EFP?

Anyway, I assume he was referring to homes and I would always support insuring your home.

Wealth is its own life insurance and so a separate policy is sometimes not needed.

Brendan
 
Brendan Burgess said:
I would always support insuring your home.

Wealth is its own life insurance
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Brendan Burgess said:
A great example of the fallacy of silo thinking.

There is no connection between the two other than some psychological connection.
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To steal your own phrase, I think you are suffering a little from silo thinking here Brendan when it comes to insurance. Wealth is not specifically attached to life insurance.

In the OP's case, they could easily afford the rebuild cost of their PPR with their wealth and high income so why should they bother with home insurance?? The cost of the OP's untimely death is multiples of that and effectively leaves the spouse with no income

Brendan Burgess said:
1) That a healthy 37 year old dies suddenly and soon.
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That's what life insurance is, an unlikely event but it is anytime between now and when they no longer have four (or more) financial dependents

Brendan Burgess said:
2) She remarries a penniless husband who depends on her financially
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Far from penniless, supporting a family 4+ kids needs a high income. Good luck finding a high earner on the lookout for a widower with 4/5 kids

Brendan Burgess said:
3) That after ten years of living off their investments, his family refuses to help out their daughter in law and their grandchildren.
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Ah yes... because no Irish family has ever fallen out over money, land or inheritance...
 
_OkGo_ said:
In the OP's case, they could easily afford the rebuild cost of their PPR with their wealth and high income so why should they bother with home insurance??
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I wouldn't advise them to insure their contents because they can easily afford to replace them.

But if their house goes on fire and damages others, they might not be able to afford the rebuilding and third party liability costs caused by damage to others.

The life insurance industry have convinced us all that we need life insurance when the reality is that wealthy people don't. The OP is wealthy. He does not need life insurance.

But I would ask anyone who thinks he does to say how much cover he should have and for how long?

Brendan
 
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Brendan Burgess said:
The OP is wealthy. He does not need life insurance.
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There is a level of wealth at which point you don't need any insurance but the OP is not at it.

I disagree with the "belt-and-braces" approach to insurance that a lot of people take and I try to insure only against costly, catastrophic events rather than routine, inexpensive events. I very carefully make sure that my house is insured (perhaps overinsured) for a full rebuild in the event of fire but I have high excess for damage causes by something like a break-in.

But death is very much a costly, catastrophic event and does happen even when young - an old school friend died at 36 a few years ago with no warning leaving a partner and child behind. The OP would be wise to have some level of life insurance.
 
Brendan Burgess said:
OK, so this is the risk that you are insuring against.

1) That a healthy 37 year old dies suddenly and soon.
2) That after ten years of living off their investments, his family refuses to help out their daughter in law and their grandchildren.

Sure it could happen. But it is vanishingly unlikely.

He absolutely does not need insurance against it.

Brendan
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Brendan Burgess said:
Steven

You recommend life insurance. Fair enough.

1) What level of cover?
2) What term?

Brendan
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Anyone can be in a road traffic accident at any time Brendan.

The case for most insurance is that the event is unlikely to happen but if it does, the cost is very high. The OP is 37, even if he retires at 60, that is 23 years left of income that will not be earned. Their lifestyle is based on two incomes. And raising that number of kids is expensive and they are only getting more expensive. Leaving a spouse with 4 kids with enough income to just about get by isn't good enough. Either is thinking "my rich family will make sure they're alright." The spouse (it could also be the spouse who dies prematurely) could feel awkward looking for money. The family may become judgmental on the requests for money. We don't know.

What level of cover? I don't know, it is impossible to give that figure without more information. What term? To the end of their working life. Reducing term cover would probably be most suitable. They need more cover now when the kids are young and more dependent and they are building their wealth, so the cover should be at its highest now. As the kids get older, wealth accumulates and the loss of working capital reduces, the need for cover reduces, so a reducing cover plan would reflect this.


Steven
www.bluewaterfp.ie
 
Brendan Burgess said:
OK, so this is the risk that you are insuring against.

1) That a healthy 37 year old dies suddenly and soon.
2) That after ten years of living off their investments, his family refuses to help out their daughter in law and their grandchildren.

Sure it could happen. But it is vanishingly unlikely.

He absolutely does not need insurance against it.

Brendan
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I'll just tell the spouses of my 2 work colleagues in their early 40s who died in the last 3 months that their situations are vanishingly unlikely.
 
MrBrurns said:
Thanks for your comments thedaddyman,

no will made but I presume all my assets will automatically go to wife if I died?

I've worked overseas but unfortunately not long enough for a pension anywhere, always <2 years.

There are not any real big spends coming up at the moment although I'm sure my wife could find a way to use 100k in the house somewhere if she put her mind to it!
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Firstly, don't assume anything and what if your wife died or, God forbid, both of you were killed in an accident?, sorry to be a killjoy but it does happen and having the issues sorted, especially guardianship of the kids as well will make life easier for those left behind.

If you worked in the UK, don't rule out following up on the UK state pension. have you considered insulation/future proofing the house?
 
We will just have to agree to disagree.

I think that the OP is wealthy enough and has enough "insurance" in terms of expected gifts and inheritances.

They do not need to contribute to the profits of the life insurance and broking industry.

@MrBrurns

If you are concerned that
  1. if you die suddenly
  2. and soon
  3. and that your family will wash their hands of your wife and their grandchildren,
  4. And that her family have no money or will wash their hands of their daughter and grandchildren
  5. and that your €400k in assets
  6. and that whatever cover you have from your public sector job
  7. and your wife's widow's pension

    won't cover their needs, then you should take out life insurance.


Brendan
 
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Brendan Burgess said:
We will just have to agree to disagree.

I think that the OP is wealthy enough and has enough "insurance" in terms of expected gifts and inheritances.

They do not need to contribute to the profits of the life insurance and broking industry.

@MrBrurns

If you are concerned that
  1. if you die suddenly
  2. and soon
  3. and that your family will wash their hands of your wife and their grandchildren,
  4. And that her family have no money or will wash their hands of their daughter and grandchildren
  5. and that your €400k in assets
  6. and that whatever cover you have from your public sector job
  7. and your wife's widow's pension

    won't cover their needs, then you should take out life insurance.


Brendan
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This is frankly a flagrantly irresponsible position to take and not just a “difference of opinion”
 
Last edited by a moderator:
But, in this case, he’s actually spot on.

He doesn’t need life cover in his situation, there are many others that are not in the fortunate position of the op that do.
 
Marc said:
“If I had my way, I would write the word ‘insure’ over every door of every cottage and upon the blotting pad of every public man, because I am convinced that, for sacrifice that are conceivably small, families can be secured against catastrophes which otherwise would smash them forever.”
— Winston Churchill
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Sensible enough - in context. When Winston was dealing with the colonies and their natives, he himself was usually the catastrophe that needed to be insured against.
 
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