# Life Insurance for a 23 year old?



## Marcus1 (17 May 2008)

I inherited a house worth €800,000. Would it be a good idea to take out life insurance? Would it make any difference?
    How does it work? Do you just pay into it for so many years that when you die  it all goes to whoever you want? Explain please.


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## mercman (17 May 2008)

If you want Life Insurance for your dependents to pay Inheritance Tax, you will have to have a 'Section 60' policy which is the only type of Life Assurance that may be used for this purpose. As a 23 year old, Life Insurance can be quite 'competitively' priced, as the cost increases the older one gets. You might need to speak with your accountant or solicitor, as either one should know your personal circumstances and / or asset profile.


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## Marcus1 (17 May 2008)

But do you have to pay into it for years before anyone can benefit from it?


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## mercman (17 May 2008)

Yes- the purpose of Life Assurance is to pay in whilst you are alive in order that a lump sum is paid after death.


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## jpd (17 May 2008)

Life assurance is generally used to protect those people that depend on your income (for example your children, spouse) in the event that you die prematurely. If you have no dependants than I would argue that you do not need life assurance.

If you take out a mortgage, then the provider will stipulate that you take out life assurance to enable him to recover the monies owed in the case of your death.

If you think that you may acquire some dependants in the future, then you may be able to save money by taking out life assurance now as the older you get, the more expensive it is.


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## RS2K (18 May 2008)

If I was 23, and assuming I had no dependents nor debts,  it'd be hard to see why I'd need life assurance.

At that age I'd suggest savings, health ins. and possibly income protection (if you are working) that would be highest priority.

There are many varied forms of life assurance, but perhaps you don't need any of them currently?


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## rmelly (18 May 2008)

mercman said:


> Yes- the purpose of Life Assurance is to pay in whilst you are alive in order that a lump sum is paid after death.


 
I think he means if he died in 3 months would it still pay out the full amount?


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## rmelly (18 May 2008)

RS2K said:


> health ins. and possibly income protection (if you are working) that would be highest priority.


 
Why?


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## RS2K (18 May 2008)

rmelly said:


> Why?



A single person with no dependents has no need for any life assurance.


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## mercman (18 May 2008)

Maybe - but perhaps the OP is interested in forward and future financial planning


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## alan.caulwel (18 May 2008)

life assurance can only be bought when there is a risk involved 
typically some one needs to have a finiancial loss in the event of any individuals death

most life companys will ask what is the nature of the insurable risk ?
before accepting a life assurance application.


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## rmelly (19 May 2008)

RS2K said:


> A single person with no dependents has no need for any life assurance.


 
Agreed - but I don't think he needs income protection.


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## LDFerguson (19 May 2008)

rmelly said:


> Agreed - but I don't think he needs income protection.


 
Very hard to say whether he does or doesn't without further details.  

If the house is his PDH, he still needs Income Protection as much as anyone else.
If the house is not his own PDH and he would have no objection to selling it if he was long-term ill, he might not need Income Protection.  That said, a lump sum of €800,000 now might not maintain his lifestyle indefinitely if he was ill, particularly if he fell ill while still young.
We also have no idea of his income or outgoings so it's hard to say what his requirement would be for continuing income if he fell ill.
He might already have Income Protection.


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