An Cosantóir

20 | The reality is consumers have changed their shopping habits in the post Celtic tiger years. There has been a seismic shift in the number of consumers who have moved from Superquinn to alternative stores such as Lidl and Aldi. The fundamental reason for this is price. Consumers are able to draw direct price comparisons between one product in Superquinn and the exact same product in Lidl. In financial services the reality is somewhat different. The reason being is the perception that financial services products are complex or difficult to compare, this is true with some products such as pensions. However, on close examination, products such as Life cover can be reviewed and the particulars of it can be analysed. Unfortunately, many consumers shy away from this because of the perceived com- plexity of it. It would be fair to say that most consumers do not understand the type of cover they have, the extent of the cover, or the length of the term of the cover. Life cover in its simplest form pays out a lump sum benefit in Money Matters I BY NOEL O'GRADY BA MBA QFA n my article last March I stressed the importance of evalu- ating ones outgoings and expenditure to ascertain where one could save money during this 'belt-tightening period'. the event of a policyholder's death. There are various types of life cover. Mortgage protection is the cheapest form of cover as the benefit decreases over time in line with a mortgage. The policy is designed to ensure there will always be sufficient cover to clear the outstanding mortgage balance should the policyholder pass away at any stage during the term of the mortgage. With level term cover the benefit remains the same for the term of the policy. Both of these types of cover are for set periods which are clearly defined when the policy is set up. Whole of life cover has no fixed term and premiums continue to be made by the policyholder up until a claim is made. There is often a savings element to this cover. In my view this type of policy is archaic. The main problem with these policies is that they tend to become very expensive as one gets older and reviewing them is imperative before premiums become unaffordable. Why review mortgage protection policies? It is important to note that the cost of Life cover has de- creased in recent years. Policies that were activated a number of years ago should be re-examined. Although the policy holder is older now than at the time of taking out the policy, the bal- ance has decreased and the cost of insurance has also de- creased. In addition, Financial Institutions such as AIB is tied to the Life assurance Company Ark Life, and Permanent tsb is tied to Irish life. Therefore, consumers who took out mortgages through AIB and Permanent tsb are likely to have their mortgage protection poli- cies with Ark Life and Irish Life respectively. These insurers may not have offered the most competi- tive premiums at the time. However, as tied agents of AIB and Permanent tsb were unable to offer mort- gage protection from any insurer other than Ark Life and Irish Life. For this reason alone, consumers should re- examine their policies. "A person only has to refrain from smoking for twelve months to qualify for non-smoker insurance rates" An Cosantóir November 2011

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