If your not familiar with Life Assurance Contracts, your eyes probably glaze over when your confronted with some of the language used, il try and shed some light on some of the policy terms and options available.
Critical Illness/Specified Illness: If you take this option on your life assurance, the company promises to pay a lump sum in the event of you contracting one of the illnesses listed on your policy. This is likely to include heart attack, cancers, organ failure....the list goes on, some companies cover 40+ illnesses. This can be taken out as a stand alone policy or can be included with the decreasing/level/whole of life type policies described in other posts. Critical Illness can be expensive as you are more likely to claim for a critical illness then to die during any particular period of time. If you include 'CI' in your life policy you will have the option to have it 'accelarated' or 'double cover'. Accelerated is cheaper as it means that if you claim on your CI, your life cover will be reduced by that amount. If you have 200k life and double cover critical illness policy, then you can claim 200k on your CI and there can be a further 200k paid out in the event of death.
Children's Life or Critical Illness: This is usually a complimentary added benefit to all policies, it will pay out a nominal sum in the event of the death of a child (6mths to 18 years) or if they contract a listed critical illness.
Hospital Cash: If you are hospitalised this benefit promises to pay you a set amount each day, eg €65, that you are in hospital. There will be a deferral period, ie you must be in hospital for 3/7 days before the payments will begin. There is also a upper limit on how many days in any year they will pay out on.
Surgical Cash: If you undergo surgery this will pay out a fixed amount, minor and major surgeries will be paid different amounts.
Sum Assured: This is the amount you are covered for.
Indexation: The ability to increase your life cover annually without medical evidence, usually 3% or 5%. Your premium will increase by a bigger % than the increase in cover.
Guaranteed Increase Option: This can be offered at regular periods whereby you have the option to increase your cover by say 20% without evidence of health. Your premium will increase by a bigger % than the increase in cover.
Premium: This is amount you pay for your cover, it can be paid monthly, quarterly or annually.
Life Assured: The person(s) who are covered on the policy. The life assured does not have to be the policy owner, ie a husband can own a policy that would pay out in the event of the death of his wife.
Deed of Assignment: The document that a lender will send to a life company to assume a hold over a policy, usually connected to a mortgage/loan.
Letter of no further interest: Confirmation from a lender that they are releasing their interest in a policy, usually only when a mortgage/loan has been cleared.
Exit Tax: Levied at 30% on any 'profits' made through a investment with a life assurance company.
Early Encashment Penalty: Levied by the life company to discourage cashing a policy in earlier than agreed.
Exclusion: Where a life company will cover you for critical illness or income protection but will exclude certain claims if they are related to a pre existing condition illness, eg back problems, mental heatlh problems in the past.
Special Terms: Where a life company will cover you for life/criticall illness but you will have to pay a higher premium due to a risk that you pose to them. Eg over weight/previous poor health.
Proposal Form: The form you complete to apply for a policy.
Underwriting: The process of assessing risk.
Market Value Adjustment: A reduction in the value of funds held within a 'with profit' fund to reflect the true market value. This is done to prevent 'profit taking' at the expense of existing policy holders.
FS
A look at how to make your money go further in post Celtic Tiger Ireland. Consumer issues, money saving tips, financial advice and Insight into what the headlines mean to you....and your back pocket.
Saturday, 30 April 2011
Life Assurance beginners guide part 3- Whole of Life Policies
Whole of life policies can potentially cover you for the WHOLE of your life, ie there is no set maturity/expiry date, these can provide very extensive cover and can have many additional options attaching to them, but they will get more expensive over the years......
Similarly to the decreasing or level term type policies, you nominate the level of cover you wish to have. The premium will depend upon underwriting where your age, health, smoker status etc will be taken into account. The term of your policy is not limited, its open ended, hence 'whole of life', but be aware that the premium you pay at the start is not guaranteed, the life company will carry out reviews on the policy at predetermined intervals, every 5 years, or annually after age 70 for example.
At the review the company can ask you to pay a higher premium for the same level of cover for the period until your next review. In fact its inevitable that the premium will rise over the years, as one gets older, the risk increases.
So whats the benefit of Whole of life policies?
FS
Similarly to the decreasing or level term type policies, you nominate the level of cover you wish to have. The premium will depend upon underwriting where your age, health, smoker status etc will be taken into account. The term of your policy is not limited, its open ended, hence 'whole of life', but be aware that the premium you pay at the start is not guaranteed, the life company will carry out reviews on the policy at predetermined intervals, every 5 years, or annually after age 70 for example.
At the review the company can ask you to pay a higher premium for the same level of cover for the period until your next review. In fact its inevitable that the premium will rise over the years, as one gets older, the risk increases.
So whats the benefit of Whole of life policies?
- They can provide very comprehensive cover for your family.
- Once your policy is in force and you continue to pay the premiums you will stay on cover. It wont expire after a set length of time.
- In the event of deteriorating health you may find it hard or impossible to get life cover, with a whole of life policy this is not an issue.
- There are many additional added cover options, hospital cash/surgical cash/critical illness cover.
- These policies may build up a surrender value over time.
- They can be assigned to your lender as security against a loan/mortgage.
- They are flexible, you have the option to reduce cover when you need to.
FS
Save Money on public Transport Taxsaver.ie
If your employer is signed up to this scheme they save money on PRSI payments and you can save money as your annual bus/rail/luas ticket will be tax free. That's a saving on an annual ticket of up to 51%!
Tickets are available for Bus, Dart, Luas or any combination of the three.
See http://www.taxsaver.ie/ for further info
FS
Tickets are available for Bus, Dart, Luas or any combination of the three.
See http://www.taxsaver.ie/ for further info
FS
Save on your Electricity and Gas
Now that the ESB (Electricity Ireland) is allowed to compete again it means that there is a wide rang of options as to the cheapest method of getting your gas and electricity. The wide range available can be confusing, visit http://www.bonkers.ie/compare-gas-electricity-prices/ and find out whats the best option for you.
To switch you normally only need your existing suppliers account number and a meter reading. You can save further by signing up to paperless billing and pay via Direct Debit.
FS
To switch you normally only need your existing suppliers account number and a meter reading. You can save further by signing up to paperless billing and pay via Direct Debit.
FS
Friday, 29 April 2011
Calculate changes to your monthly mortgage
The National Consumer agency has put together a great mortgage calculator which allows you to see what any changes to your interest rate means to you on a monthly basis.
http://www.itsyourmoney.ie/iym/ratechangecalculator
FS
http://www.itsyourmoney.ie/iym/ratechangecalculator
FS
Thursday, 28 April 2011
Life Assurance beginners guide part 2- Level Term Assurance
Level Term life assurance is a fairly simple to understand product offered by life assurance companies.
You select what level of cover you wish to have and the term that you want. The premium that you pay will remain the same throughout the policy term as will the level of cover.
The policy can be 'single', ie just covering one life. If the policy covers two lives, eg a husband and wife, the policy can be written on a 'joint' or 'dual' basis.
For example, if you have a policy that covers two people for €200k, you can choose to cover these lives 'jointly', (200k gets paid out in the event of the death of one of the two people) or on a 'dual' basis (200k gets paid out on the first death, and a further 200k gets paid out on the second death also). Clearly choosing a Dual basis will be more expensive as the life company is at risk for €400k in total.
Critical illness can also be added to these contracts but i will deal with this and other add on options in future posts.
Level term policies can be used as security against a mortgage but can also be an effective stand alone policy.
In the event of the death of a breadwinner in a household its likly that any mortgage would be cleared as you would already have life assurance, but a mortgage is only one thing that you need to cover. It is always advisable to have a strong life policy seperate from your mortgage cover as you may need to replace their income for a number of years, if there are children in the household it is advisable to at least have enough cover to replace the lost income until the children would be able to be independant from the family home.
The actual calculation on how much cover you should have can be taken care of by your financial advisor.
Self employed term assurance is a product almost identicle to what is listed above but it is only available to self employed individuals, usually at the time of arranging their personal pensions. They can only be written on a single life basis and cannot be assigned as security against a mortage but the big benefit is that you can get tax relief on your premiums.
As with any life assurance policy, the premium you pay will be determined by what level of risk you pose to the life assurance company, age, smoker status, weight, family medical history are just a few areas that Underwriters are concerned about when they look at your application form.
If you have a chequered medical past it does not mean that the company will reject your application neccessarily, they may accept you on cover but on 'special rates'. This means that you will pay a higher premium then you would if you were a normal or average risk for your age.
While it might appear to be a smart move to be economical with the truth on your application, (make yourself a couple of stone lighter, not tell the truch about your alcahol consumption etc) to ensure a more afforable premium, BEWARE, this can be considered 'non disclosure' and could result in difficulties when it comes to claiming on the policy.
FS
You select what level of cover you wish to have and the term that you want. The premium that you pay will remain the same throughout the policy term as will the level of cover.
The policy can be 'single', ie just covering one life. If the policy covers two lives, eg a husband and wife, the policy can be written on a 'joint' or 'dual' basis.
For example, if you have a policy that covers two people for €200k, you can choose to cover these lives 'jointly', (200k gets paid out in the event of the death of one of the two people) or on a 'dual' basis (200k gets paid out on the first death, and a further 200k gets paid out on the second death also). Clearly choosing a Dual basis will be more expensive as the life company is at risk for €400k in total.
Critical illness can also be added to these contracts but i will deal with this and other add on options in future posts.
Level term policies can be used as security against a mortgage but can also be an effective stand alone policy.
In the event of the death of a breadwinner in a household its likly that any mortgage would be cleared as you would already have life assurance, but a mortgage is only one thing that you need to cover. It is always advisable to have a strong life policy seperate from your mortgage cover as you may need to replace their income for a number of years, if there are children in the household it is advisable to at least have enough cover to replace the lost income until the children would be able to be independant from the family home.
The actual calculation on how much cover you should have can be taken care of by your financial advisor.
Self employed term assurance is a product almost identicle to what is listed above but it is only available to self employed individuals, usually at the time of arranging their personal pensions. They can only be written on a single life basis and cannot be assigned as security against a mortage but the big benefit is that you can get tax relief on your premiums.
As with any life assurance policy, the premium you pay will be determined by what level of risk you pose to the life assurance company, age, smoker status, weight, family medical history are just a few areas that Underwriters are concerned about when they look at your application form.
If you have a chequered medical past it does not mean that the company will reject your application neccessarily, they may accept you on cover but on 'special rates'. This means that you will pay a higher premium then you would if you were a normal or average risk for your age.
While it might appear to be a smart move to be economical with the truth on your application, (make yourself a couple of stone lighter, not tell the truch about your alcahol consumption etc) to ensure a more afforable premium, BEWARE, this can be considered 'non disclosure' and could result in difficulties when it comes to claiming on the policy.
FS
What the sale of Quinn Insurance could mean to you
Today Quinn Insurance announced a 2009 loss of €706 million. The troubled insurer will be sold to Anglo Irish Bank and Liberty Mutual who will operate the company as a going concern, this is good news to its 1500+ employees but may not be good news for our car and home insurance premium's.
Due to the massive loss its likely that Quinn will have to make use of the Insurance Compensation Fund, to fund this, the government could place a further levy of 2% on all non life assurance policies. More will be known later on this year.
FS
Due to the massive loss its likely that Quinn will have to make use of the Insurance Compensation Fund, to fund this, the government could place a further levy of 2% on all non life assurance policies. More will be known later on this year.
FS
Wednesday, 27 April 2011
Life Assurance a Beginners Guide
Life Assurance is the type of thing that few of us think about until its probably too late, indeed its the type of thing that we actually never want to need, but the inevitable will happen one day and its better to be adequately prepared.
There are numerous types of policies and each serve their own particular purpose, its best to speak to your financial advisor to have a full review done, he/she will let you know whats the right level and type of cover for you and your situation.
Perhaps its obvious to say but Life Assurance is sold by Life companies, eg Aviva, Canada Life, Friends First etc. In return for a premium, they will promise to pay out a sum of money if an insured event happens. This usually means death, but critical illness is also an optional cover to have.
I will give some information on the main types of Life Assurance. The first type is decreasing term cover.
Decreasing Term Life Assurance
This is the most common form of life assurance in the Irish Market and is usually taken out in connection to a mortgage. It promises to clear your mortgage in the event of death. The level of cover will reduce year by year in line with what is outstanding on your mortgage (apart from a few exceptions, everyone who takes out a residential mortgage is legally obliged to have at least enough life cover to clear the loan in the event of death).
This is the cheapest form of life cover as the risk to the life company is decreasing annually. The premium for this type of policy remains the same for the term of your policy.
This policy will usually be 'assigned' to your bank as security against you mortgage, ie the bank will use the proceeds of the policy to clear your mortgage. Any amount over and above what it takes to clear the mortgage will be refunded to your estate or to the surviving party on the policy should there be two people covered.
If you have cleared your mortgage, it does not make your policy invalid or useless in anyway. As far as your life assurance company is concerned they don't care if you have a mortgage or not, you are paying them to provide you cover, and they will continue to do so weather you have a mortgage or not.
These policies work well with mortgages as the cover decreases and is the cheapest way to cover your obligation to have life assurance. If you are looking for cover to provide for your family if you were to pass away, this would not generally be the type of policy to choose, as it decreases annually, this will of course provide less and less benefit over the years. In my next posts i shall go through other forms of cover and various options and terms common to life assurance.
Again if there is something you want me to cover in more detail, please let me know.
FS
There are numerous types of policies and each serve their own particular purpose, its best to speak to your financial advisor to have a full review done, he/she will let you know whats the right level and type of cover for you and your situation.
Perhaps its obvious to say but Life Assurance is sold by Life companies, eg Aviva, Canada Life, Friends First etc. In return for a premium, they will promise to pay out a sum of money if an insured event happens. This usually means death, but critical illness is also an optional cover to have.
I will give some information on the main types of Life Assurance. The first type is decreasing term cover.
Decreasing Term Life Assurance
This is the most common form of life assurance in the Irish Market and is usually taken out in connection to a mortgage. It promises to clear your mortgage in the event of death. The level of cover will reduce year by year in line with what is outstanding on your mortgage (apart from a few exceptions, everyone who takes out a residential mortgage is legally obliged to have at least enough life cover to clear the loan in the event of death).
This is the cheapest form of life cover as the risk to the life company is decreasing annually. The premium for this type of policy remains the same for the term of your policy.
This policy will usually be 'assigned' to your bank as security against you mortgage, ie the bank will use the proceeds of the policy to clear your mortgage. Any amount over and above what it takes to clear the mortgage will be refunded to your estate or to the surviving party on the policy should there be two people covered.
If you have cleared your mortgage, it does not make your policy invalid or useless in anyway. As far as your life assurance company is concerned they don't care if you have a mortgage or not, you are paying them to provide you cover, and they will continue to do so weather you have a mortgage or not.
These policies work well with mortgages as the cover decreases and is the cheapest way to cover your obligation to have life assurance. If you are looking for cover to provide for your family if you were to pass away, this would not generally be the type of policy to choose, as it decreases annually, this will of course provide less and less benefit over the years. In my next posts i shall go through other forms of cover and various options and terms common to life assurance.
Again if there is something you want me to cover in more detail, please let me know.
FS
Monday, 25 April 2011
66+ Free Travel Scheme
Taken from citizensinformation.ie:
Everyone aged 66 and over living permanently in Ireland, is entitled to the free travel scheme. Certain people under that age are also entitled. In some cases, a free companion pass may be available to allow a person to accompany the free travel pass holder. If you qualify for free travel, you will be issued with a pass that you must carry with you when using public transport. Free travel passes are non-transferrable and can only be used by the named person.
Free travel is available on all State public transport (bus, rail and Dublin's LUAS service). Free travel is also available on a limited number of services that are operated by private bus transport companies. Private bus transport operators that have opted in to the Free Travel scheme, accept free travel passes.
The Free Travel pass also entitles one to use Aircoach services in the Dublin area. As they offer a number of routes, its a great alternative to either getting a taxi to, or park in, the airport.
www.aircoach.ie
FS
Everyone aged 66 and over living permanently in Ireland, is entitled to the free travel scheme. Certain people under that age are also entitled. In some cases, a free companion pass may be available to allow a person to accompany the free travel pass holder. If you qualify for free travel, you will be issued with a pass that you must carry with you when using public transport. Free travel passes are non-transferrable and can only be used by the named person.
Free travel is available on all State public transport (bus, rail and Dublin's LUAS service). Free travel is also available on a limited number of services that are operated by private bus transport companies. Private bus transport operators that have opted in to the Free Travel scheme, accept free travel passes.
The Free Travel pass also entitles one to use Aircoach services in the Dublin area. As they offer a number of routes, its a great alternative to either getting a taxi to, or park in, the airport.
www.aircoach.ie
FS
Sunday, 24 April 2011
Negative Equity Mortgages
The Central Bank has given approval for negative equity mortgages. This would allow people who are currently in negative equity to but a new house and carry the shortfall across to their new mortgage.
In reality it will only apply to high earning individuals who will, by taking the new mortgage, actually lower their LTV (Loan to Value ratio).
Banks will be able to offer this on a discretionary basis but the Central Bank has disallowed them to actively promote the offer. But note, if you currently enjoy a tracker rate on your current mortgage, this will be lost.
FS
In reality it will only apply to high earning individuals who will, by taking the new mortgage, actually lower their LTV (Loan to Value ratio).
Banks will be able to offer this on a discretionary basis but the Central Bank has disallowed them to actively promote the offer. But note, if you currently enjoy a tracker rate on your current mortgage, this will be lost.
FS
20% of the Irish People left with €70 or less after bills per month
A survey by the Irish League of Credit Unions found that 20% of the population has only €70 left each month after paying their bills to use as disposable income. The statistics for those who have no money left is even scarier:
http://www.rte.ie/news/2011/0415/creditunion.html
FS
http://www.rte.ie/news/2011/0415/creditunion.html
FS
The ever rising price of petrol
Anyone who drives will have noticed the apparently never ending rise in petrol and diesel prices over the last two years. While oil prices are still well below their record highs from 2008, Irish Petrol prices have never been more expensive. This is mostly due to rises in carbon Levy's, vat and excise duty rates.
While some may take it as a sign to jump on your bike to get around, for most that is not an option. You should shop around for your petrol as you do for any other product, www.pumps.ie allows you to compare all the prices of the service stations in your area.
Always fill up in the cheapest place, at the very least it will signal to the station operators that their customers are responsive to prices changes and will respond to value.
FS
While some may take it as a sign to jump on your bike to get around, for most that is not an option. You should shop around for your petrol as you do for any other product, www.pumps.ie allows you to compare all the prices of the service stations in your area.
Always fill up in the cheapest place, at the very least it will signal to the station operators that their customers are responsive to prices changes and will respond to value.
FS
Negotiating/Bargaining, call it what you will it works!
The business environment in Ireland in 2011 is a very different place then it was just a few years ago. Companies are actively competing for business through better customer service and attractive pricing. Retaining your existing customer base is the name of the game and you would be amazed what you get simply for asking.
A recent call to a leading Satalite TV provider went like this:
FS- Im interested in cancelling my account, one of your competitors is offering a great deal.
Agent- If you stay put we can offer you 25% off your bill for 6 months?
FS- To be honest its worth it for me to move
Agent- One moment we might have another offer available.....taps at computer....ok, we can give you 50% off your bill for 6 months and then 25% off your bill for a further 6 months.
With the one call hundreds of euro was saved over a year. Another example with another service provider:
FS- I have been a customer of yours for 5 years and would like you to reduce your bill
Agent- Ok i can give you €5 off your bill every month as a valued customer.
Dont ask, dont get.
FS
A recent call to a leading Satalite TV provider went like this:
FS- Im interested in cancelling my account, one of your competitors is offering a great deal.
Agent- If you stay put we can offer you 25% off your bill for 6 months?
FS- To be honest its worth it for me to move
Agent- One moment we might have another offer available.....taps at computer....ok, we can give you 50% off your bill for 6 months and then 25% off your bill for a further 6 months.
With the one call hundreds of euro was saved over a year. Another example with another service provider:
FS- I have been a customer of yours for 5 years and would like you to reduce your bill
Agent- Ok i can give you €5 off your bill every month as a valued customer.
Dont ask, dont get.
FS
Doing a clear out? Make some money out of it
Well its spring cleaning time (well early summer cleaning really!) and like most people you probably have a lot of stuff gathering dust on your shelves, rather then binning your previously prized possessions there could well be someone out there who would be willing to take it off your hands.
Advertising stuff for sale online is easy, just make sure to take good pictures and ask a realistic price. You might have paid a lot for the things you are trying to sell but this does not always mean that is what the public is willing to pay for them.
There are a lot of sites where you can sell online but i find www.adverts.ie to be an excellent service, there are no charges whatsoever and you can check out the reliability of other buyers and sellers in advance of making a deal.
FS
Advertising stuff for sale online is easy, just make sure to take good pictures and ask a realistic price. You might have paid a lot for the things you are trying to sell but this does not always mean that is what the public is willing to pay for them.
There are a lot of sites where you can sell online but i find www.adverts.ie to be an excellent service, there are no charges whatsoever and you can check out the reliability of other buyers and sellers in advance of making a deal.
FS
Saturday, 23 April 2011
Car Insurance Renewal
Its the easiest thing in the world, your car insurance renewal comes through your letter box, you tick the box, pay the annual premium and life goes on as normal. However with just a bit of leg work you could save yourself a lot of money.
Go to your insurers website and get a new quote, almost inevitably the quote you get will be less then what your renewal is. Put a call through to the customer service, they will squirm trying to explain the difference but will of course off you the quote you received online.
The insurance company relies on your inaction when they send you the renewal and new customers usually get a better deal. MAKE THAT CALL!
Naturally i would say your best bet is to get quotes from a number of sources before settling, its a highly competitive market and you should get that to work to your advantage.
FS
Go to your insurers website and get a new quote, almost inevitably the quote you get will be less then what your renewal is. Put a call through to the customer service, they will squirm trying to explain the difference but will of course off you the quote you received online.
The insurance company relies on your inaction when they send you the renewal and new customers usually get a better deal. MAKE THAT CALL!
Naturally i would say your best bet is to get quotes from a number of sources before settling, its a highly competitive market and you should get that to work to your advantage.
FS
Upskill for free
Adding to your skills or abilities will always make you more attractive to potential employers (or more important to your current boss) but courses can often be expensive and time consuming.
You can however complete some online training in your spare time, there is no timetable, do a bit whenever you can, and its a good way to brush up on your skills or add new ones.
A good site that i have found is www.alison.com , it offers completely free courses in everything from Microsoft Excel to First Aid.
FS
You can however complete some online training in your spare time, there is no timetable, do a bit whenever you can, and its a good way to brush up on your skills or add new ones.
A good site that i have found is www.alison.com , it offers completely free courses in everything from Microsoft Excel to First Aid.
FS
Friday, 22 April 2011
Where can i find a Financial Advisor?
If you are looking to arrange insurance or investments or just simply to receive some financial advice, where should you go?
Financial advisers are regulated by the central bank and will be able to offer you an independent opinion, please contact one of the professional organisations listed below to get in touch with someone local.
PIBA (Professional Insurance Brokers Association) http://www.piba.ie/ +353 (1) 492 2202
IBA (Irish Brokers Association) https://www.iba.ie/ +353 1 661 3067
FS
Financial advisers are regulated by the central bank and will be able to offer you an independent opinion, please contact one of the professional organisations listed below to get in touch with someone local.
PIBA (Professional Insurance Brokers Association) http://www.piba.ie/ +353 (1) 492 2202
IBA (Irish Brokers Association) https://www.iba.ie/ +353 1 661 3067
FS
Anything i have not covered? Let me know!
If there is anything i have left out, or anything you wish me to cover, let me know! Send me a comment and il do my best to help you out. You can subscribe to the blog or become a 'follower', see how in the side bar.
FS
FS
Protect your Income
Your Income is your biggest asset, if you were unable to work how long would you be able to maintain your lifestyle and pay your bills?
Income protection is a product that is sold by Life Assurance companies that promises to pay you a replacement income in the event of you being unable to work due to accident, illness or injury.
You can cover up to 75% of your income, less any social welfare illness benefit should you be entitled to it. The payment will continue until such a time as you are able to return to work or until your chosen retirement age.
You will be able to chose a 'defferal period' when you take your policy out, this is the length of time that you must be absent from work before the benefits kick in, the longer the deferral period, the cheaper the premium you will pay. Self employed people should ideally chose the shortest deferral period. When setting the premium, the life company will take the nature of employment into account, office workers are low risk, working on a building site is high risk etc.
Look at your contract of employment to see what, if any, sickness pay you may be entitled to receive from your employer before choosing a deferral period.
This type of insurance will not cover you for unemployment or redundancy and is really designed for longer term illnesses. The good news is that you are entitled to tax relief on your premium at your marginal rate of tax, this makes this form of cover even more attractive.
FS
Income protection is a product that is sold by Life Assurance companies that promises to pay you a replacement income in the event of you being unable to work due to accident, illness or injury.
You can cover up to 75% of your income, less any social welfare illness benefit should you be entitled to it. The payment will continue until such a time as you are able to return to work or until your chosen retirement age.
You will be able to chose a 'defferal period' when you take your policy out, this is the length of time that you must be absent from work before the benefits kick in, the longer the deferral period, the cheaper the premium you will pay. Self employed people should ideally chose the shortest deferral period. When setting the premium, the life company will take the nature of employment into account, office workers are low risk, working on a building site is high risk etc.
Look at your contract of employment to see what, if any, sickness pay you may be entitled to receive from your employer before choosing a deferral period.
This type of insurance will not cover you for unemployment or redundancy and is really designed for longer term illnesses. The good news is that you are entitled to tax relief on your premium at your marginal rate of tax, this makes this form of cover even more attractive.
FS
Thursday, 21 April 2011
'All that Glitters is not gold'
The price of Gold on the markets has just hit an all time high of $1500 per ounce, maybe you could already guess that with all the new cash for gold type stores that have sprung up over the last couple of years.
They have been accused as being one factor in the rise in burglary's, as they might be seen as somewhere that thieves can get rid of stolen goods easily, but that issue is for another day.
If you are looking to sell some old jewelry to raise some money, i would suggest that you get in touch with your local jewelers shop, most will also buy unwanted gold products but the difference is, your far more likely to get a decent price for it compared to the paltry amount you would be offered in one of these walk in gold buying operations. The process could take a little longer, your jeweler will need time to test the golds quality, but in the long run your going to come away with more in your pocket.
One thing to note, no matter where you go, you will only be offered the scrap weight value of the metal, just because you paid €800 for a fancy chain does not mean that is what it is worth to melt down.
FS
They have been accused as being one factor in the rise in burglary's, as they might be seen as somewhere that thieves can get rid of stolen goods easily, but that issue is for another day.
If you are looking to sell some old jewelry to raise some money, i would suggest that you get in touch with your local jewelers shop, most will also buy unwanted gold products but the difference is, your far more likely to get a decent price for it compared to the paltry amount you would be offered in one of these walk in gold buying operations. The process could take a little longer, your jeweler will need time to test the golds quality, but in the long run your going to come away with more in your pocket.
One thing to note, no matter where you go, you will only be offered the scrap weight value of the metal, just because you paid €800 for a fancy chain does not mean that is what it is worth to melt down.
FS
Visit the Cinema for €4 for the unemployed
With almost 14% unemployment in the country these days the doom and gloom can seem fairly unrelenting. If you are in the unhappy position of being unwaged, doing simple things like heading out to watch a movie can seem out of your grasp if your means are limited.
IMC cinemas are offering the unemployed a chance to catch a movie for only €4 during the week in their 6 cinemas country wide. Details are in the link below.
http://www.imccinemas.ie/events.asp?idcinema=1&idevent=84
Enjoy!
FS
IMC cinemas are offering the unemployed a chance to catch a movie for only €4 during the week in their 6 cinemas country wide. Details are in the link below.
http://www.imccinemas.ie/events.asp?idcinema=1&idevent=84
Enjoy!
FS
Wednesday, 20 April 2011
Stamp Duty on payment methods
Did you know that you pay stamp duty on all your methods of payment except for cash, currently it breaks down like this:
Credit Card- Stamp duty of €30 per year
Debit Card (Laser/Visa Debit)- €5 per year
Cheques- Every cheque you write incurs a stamp duty payment of 50 cent.
Credit cards, if paid off every month, can be a useful tool in handling your money, however if you have a number of credit cards you are paying €30 for each of them. Pick the card with the smallest interest rate and cancel the rest.
Cheques are being phased out over the next few years and a 50 cent charge will no doubt hasten their demise.
At only 5 Euro per year, your debit card should be used in any transaction which you can, it allows you to never over spend, the money is taken out of your account immediately and you can easily keep track on your spending through your online banking service.
FS
Credit Card- Stamp duty of €30 per year
Debit Card (Laser/Visa Debit)- €5 per year
Cheques- Every cheque you write incurs a stamp duty payment of 50 cent.
Credit cards, if paid off every month, can be a useful tool in handling your money, however if you have a number of credit cards you are paying €30 for each of them. Pick the card with the smallest interest rate and cancel the rest.
Cheques are being phased out over the next few years and a 50 cent charge will no doubt hasten their demise.
At only 5 Euro per year, your debit card should be used in any transaction which you can, it allows you to never over spend, the money is taken out of your account immediately and you can easily keep track on your spending through your online banking service.
FS
Tuesday, 19 April 2011
Income Tax changes in Budget 2011
A somewhat belated look at what effect Budget 2011 will have on your take home wages.
Income tax bands
· The standard rate tax bands display the level of income one can have before having to pay higher rate income tax (currently 41%).
Income tax: age exemption limits*
· If an individual or married couple (Age 65+) earn less than outlined below, they are not liable for Income tax on their earnings.
*Where an individuals total income does not exceed €4,004.
PRSI
Income Taxes
- Tax Bands and Credits were reduced from
Income tax bands
· The standard rate tax bands display the level of income one can have before having to pay higher rate income tax (currently 41%).
Standard Rate Bands from | ||
2010 (€) | 2011 (€) | |
Single / Widowed | 36,400 | 32,800 |
Married One Income | 45,400 | 41,800 |
Married Two Incomes* | 72,800 | 65,600 |
One Parent / Widowed Parent | 40,400 | 36,800 |
*The maximum that can be transferred between spouses is €45,400 in 2010 and €41,800 in 2011.
Income tax: age exemption limits*
· If an individual or married couple (Age 65+) earn less than outlined below, they are not liable for Income tax on their earnings.
Age (65+) Exemption Limits from | ||
2010 (€) | 2011 (€) | |
Single | 20,000 | 18,000 |
Married | 40,000 | 36,000 |
*Age credits and exemptions are being abolished over 4 years.
USC
· The Universal Social Charge is a new levy which applies to gross income and replaces the Health and Income levy. This took effect on 01st January 2011. The rates are as follows:
Individuals Under the age of 70
0% | below €4,004* |
2% | €0 to €10,036 |
4% | €10,037 to €16,016 |
7% | above €16,016 |
*Where an individuals total income does not exceed €4,004.
Individuals aged 70 and over
2% | Up to €10,036 |
4% | Over €10,036 |
· People aged 70 or over will pay the Universal Social Charge at a maximum rate of 4%, irrespective of income. Social welfare payments (payments from the Department of Social Protection) and similar payments are exempt from the USC. Medical card holders will pay the USC at a maximum rate of 4%.
PRSI
· The PRSI ceiling of €75,036 has been abolished. This means that PRSI is payable on all income, previously you paid only on income up to €75k.
· The Class S (Self-Employed) PRSI rate has increased from 3% to 4%.
· As mentioned above, the PRSI relief on employer contributions to occupational pensions has been reduced by 50%.
Bonds, a beginners guide
We hear about them every day but most would struggle to define them, I've put together a short guide to some Bond basics, enjoy!
What is a Bond?
Bonds are essentially IOU’s. When you invest in a bond you are lending money to the issuer. In return for the loan the issuer promises to pay your original capital back at the end of the term and interest payments in the intervening period. The rate of interest is decided before a bond is issued. It is also known as selling debt or ‘paper’.
Who issues Bonds?
Primarily bonds are issued by companies and governments but they can also be issued by local authorities or government bodies. Bonds are issued to help pay for particular projects or in the case of the Irish Government, just prior to the IMF intervention, for general day to day expenditure. Some governmental bonds issued directly to members of the public may carry beneficial tax implications vs. a bank account e.g. no DIRT/exit tax payable (see the An Post website for a list of their investments and the T+C’s that apply).
What is a Bond Fund?
Bond Funds are mutual funds that invest in bonds. These are usually accessed via an investment through a life assurance company.
Why invest in Bonds?
Generally bonds (and bond funds) seek to provide income and they are normally considered less risky than stock market based investments. Bonds help to provide diversification in a portfolio i.e. they can provide stability in turbulent markets. For example, the 3 year annualised performance of one particular European bond fund provided an annual return of c.6.2% compared to an average annual loss of -9.79% on their European Equity fund during the same period.
How do you know that the issuer will pay you back?
The quality of a bond is based on the perceived ability of the issuer to pay its debt. Each bond is given a rating by a rating agency (Moodys, Fitch etc) from the highest quality (least risky) AAA to the lowest DDD. A bond is rated as ‘Investment grade’ if its rating is BBB- or higher. Bonds that are not rated as investment grade are known as high yield bonds or ‘Junk Bonds’. Generally the lower the rating, the higher the risk premium (interest rate) will be asked by investors.
How do Bond investors make money?
You can make money in two ways with bonds. First you can receive the income from the bonds interest payments. The longer the term of a bond the riskier it is considered and generally it will pay more interest. You can also sell on a bond on the ‘secondary market’ for more than you bought if for. The value of an existing bond is influenced in two ways, firstly the amount of income being realised from the bond (or ‘Yield’) and also the prevailing interest rate. Bonds are very sensitive to interest rate change; they have an inverse relationship, i.e. if the interest rate goes down, the value of existing bonds paying more interest goes up.
The Bond Market
A secondary market exists for the buying and selling of existing bonds. In the US
Monday, 18 April 2011
Permanent TSB offers incentive to pay a lump sum off your Tracker
Permanent TSB, Ireland's largest residential mortgage lender, today announced an incentive to pay a lump sum off your tracker mortgage.
If your a tracker mortgage customer of the PTSB and are in the lucky position to be able to pay a lump sum off your mortgage before June 17th, they will give you a 10% bonus.
E.g. If you can afford to pay a lump sum of €10k, PTSB will take a further €1000 from what you owe, this has the effect of not only reducing the amount that you owe but also will save you on Interest payments and potentially take years off the term of your mortgage.
The offer is also available to those in arrears, but only after those arrears are cleared.
While its good to see an Irish bank take a somewhat innovative approach to pay down on their loss making tracker mortgage book, this is only a first step. Watch this space, in the coming years there will be much stronger discounts available to people on trackers.
FS
If your a tracker mortgage customer of the PTSB and are in the lucky position to be able to pay a lump sum off your mortgage before June 17th, they will give you a 10% bonus.
E.g. If you can afford to pay a lump sum of €10k, PTSB will take a further €1000 from what you owe, this has the effect of not only reducing the amount that you owe but also will save you on Interest payments and potentially take years off the term of your mortgage.
The offer is also available to those in arrears, but only after those arrears are cleared.
While its good to see an Irish bank take a somewhat innovative approach to pay down on their loss making tracker mortgage book, this is only a first step. Watch this space, in the coming years there will be much stronger discounts available to people on trackers.
FS
Earn some extra money for your opinions
Irish Opinions is a web site that will send you surveys for you to complete, the surveys can relate to your consumer habits and opinions on products or services.
Once you register with them you may receive a number of opportunities to complete surverys every week, you will get paid for each completed survery, anywhere from 50 cent to a few euro depending on the complexity and length of the survey.
Once you build up at least €10 you can convert this into vouchers for the likes of Tesco, HMV and Amazon.
www.irishopinions.com
FS
Once you register with them you may receive a number of opportunities to complete surverys every week, you will get paid for each completed survery, anywhere from 50 cent to a few euro depending on the complexity and length of the survey.
Once you build up at least €10 you can convert this into vouchers for the likes of Tesco, HMV and Amazon.
www.irishopinions.com
FS
Medical Card, are you elligible?
Medical Cards are more widely available then you might think.
While they are means tested, they do take into account things like mortgage payments, rent, life insurance and the cost of commuting to work, take a look at https://www.sspcrs.ie/portal/medapp/ and you can even apply online.
There are two types of cards:
GP visit cards cover the cost of going to your GP and full medical cards cover that and any perscriptions that you are given. Also if your in receipt of a full medical card you will pay a maximum of 4% Universal Social Charge as opposed to 7%.
Every Little Helps.
FS
While they are means tested, they do take into account things like mortgage payments, rent, life insurance and the cost of commuting to work, take a look at https://www.sspcrs.ie/portal/medapp/ and you can even apply online.
There are two types of cards:
GP visit cards cover the cost of going to your GP and full medical cards cover that and any perscriptions that you are given. Also if your in receipt of a full medical card you will pay a maximum of 4% Universal Social Charge as opposed to 7%.
Every Little Helps.
FS
Sunday, 17 April 2011
Get a Handle on your Direct Debits
You should find out what your paying for!!
Take a look at a recent bank statement or your list of Direct Debits on your online banking, do you recognise them all? Chances are that some will be a complete mystery, it could be a old life assurance policy from a mortgage top up you paid off years ago or any number of contracts that you entered but are no longer valid. Do you really need that mobile phone insurance you bought for the phone before last??
You may be able to cancel them directly with your online banking service but i would reccomend contacting the differnet providers in advance to find out what each payment is for.
FS
Take a look at a recent bank statement or your list of Direct Debits on your online banking, do you recognise them all? Chances are that some will be a complete mystery, it could be a old life assurance policy from a mortgage top up you paid off years ago or any number of contracts that you entered but are no longer valid. Do you really need that mobile phone insurance you bought for the phone before last??
You may be able to cancel them directly with your online banking service but i would reccomend contacting the differnet providers in advance to find out what each payment is for.
FS
The Basics, Budgeting your income
Whether you bring home €1500 or €15,000 per month, poor financial planning can really hurt you. Do you know if you end each month better or worse off then the last? Step one is to take stock of where you stand financially, only then will you be in a position to make the necessary changes you might not want to face up to, but will ultimatly need to take.
Below i suggest a method one might use in getting control of their finances, you might have your own take on it, thats fine, as long as your clear about where you stand, codding yourself will only affect you in the long run.
Step One: Where is your money going?
Take out a sheet of paper, list your annual income.This should include, net (after tax) salary, pension, any social welfare benefit (child welfare, rent relief, state pension), mortgage interest relief and any other income you are in receipt of during the year. Add it all up and this figure is what is available to you.
Next (and this part can be quite scary!) list all of your fixed outgoings, mortgage, rent, loan repayments, managment fees, TV licence, school fees, car tax, tv/phone/internet, life/health insurance, crech fees, pension contributions etc.
You will also need to estimate your other bills, gas, electicity, car/house insurance, waste collection, mobile phone, road tolls, petrol etc. If you are unsure how to estimate, take a look over the last 6 months worth what you spent and divide it out by the number of months to get an average. I would suggest that you always err on the high side of an estimate, its better to be suprised by a lower than average bill in the future rather than be suprised by one you need to find extra money for.
Add the fixed expenses to the changeable expenses and subtract it from your income. The figure you arrive at is the money you have left to live on. This money is to pay for your food, clothing, holidays, savings and anything else you want or need. Divide this by twelve to find out what you can spend each month.
Step Two: Make a plan
Now you can see in black and white what you have and what you need, how does your financial situation look? Depending on what figures you came up with you might be comfortable and have a healthy surplus to play with or you might be put to the pin of your collar. Either way you should decide what to do with the money that you have to hand. Can you afford to save some, if so, how much? Make a decision on what amount you can put aside.
If your monthly living amount seems tight it might make sense to rationalise your spending, some insurance might be more worthwile than others, are you getting the best value electricty/gas/tv package etc? More specific info on this area will be covered in future posts. It dosnt matter if your a captain of industry or his P.A. either way you owe it to yourself to get good value for the money you spend.
Step Three: Put your plan into Action
I would suggest starting each month with a clean slate.
Using your online banking facilities can really help you do this. Figure out what you need to put away each month for your fixed expenses, for example, if your managment fees are €1200 per year then you should set aside €100 every month to go twords this.
Set up a savings account with your bank or an online bank like RabboBank, either way it is easy to transfer the money for your fixed expenses to your savings account. This way the money is out of your current account and not immediatly available for you to spend. It also has the added benefit of earning you some interest and when that bill eventually lands on your lap, you are prepared.
If you had planned to save something then transfer it out of your current account on pay day as well.
If your a 'super saver' then also put any money you had left over from last month into your savings account, you would be amazed how fast your savings will grow if you do this.
A lot of gas and electricity bills are paid every two months, now you know your average monthly spend on these why not pay them on pay day too? Most utility companies allow you to pay a bill online, pay what you think you will owe every month in advance via Laser/Visa Debit, dont wait for the bill to arrive. So if you know you pay on average €160 every bill on electricity, then pay €80 every month, if it turns out that your final amount over the two months is less, then you dont have to pay as much next month. You can do the same with TV/Phone/Internet providers such as UPC.
The idea is that on the day you get paid you pay out whatever you need to pay. The amount you have left over is your spending money, you can adjust your spending accordingly.
If you have €600 left over after paying all your bills, fixed and variable, and its 30 days till your next pay day then you know you could spend €20 per day and your on target. Some days you wont spend anything and others you will spend a lot, just divide the number of days by the amount you have left in your current account and you will know how you are fareing. Your also safe in the knowledge that you have set aside your savings for the month so you will be well preared for your big expenses like car tax or insurance.
Everyones situation is different and it will be harder to estimate expenses for some but the basic idea remains, your income must at least meet your outgoings over a year or your in trouble. You may have to take drastic action but unless you have a true grasp on the figures you may be lulling yourself into a false sense of security.
FS
Below i suggest a method one might use in getting control of their finances, you might have your own take on it, thats fine, as long as your clear about where you stand, codding yourself will only affect you in the long run.
Step One: Where is your money going?
Take out a sheet of paper, list your annual income.This should include, net (after tax) salary, pension, any social welfare benefit (child welfare, rent relief, state pension), mortgage interest relief and any other income you are in receipt of during the year. Add it all up and this figure is what is available to you.
Next (and this part can be quite scary!) list all of your fixed outgoings, mortgage, rent, loan repayments, managment fees, TV licence, school fees, car tax, tv/phone/internet, life/health insurance, crech fees, pension contributions etc.
You will also need to estimate your other bills, gas, electicity, car/house insurance, waste collection, mobile phone, road tolls, petrol etc. If you are unsure how to estimate, take a look over the last 6 months worth what you spent and divide it out by the number of months to get an average. I would suggest that you always err on the high side of an estimate, its better to be suprised by a lower than average bill in the future rather than be suprised by one you need to find extra money for.
Add the fixed expenses to the changeable expenses and subtract it from your income. The figure you arrive at is the money you have left to live on. This money is to pay for your food, clothing, holidays, savings and anything else you want or need. Divide this by twelve to find out what you can spend each month.
Step Two: Make a plan
Now you can see in black and white what you have and what you need, how does your financial situation look? Depending on what figures you came up with you might be comfortable and have a healthy surplus to play with or you might be put to the pin of your collar. Either way you should decide what to do with the money that you have to hand. Can you afford to save some, if so, how much? Make a decision on what amount you can put aside.
If your monthly living amount seems tight it might make sense to rationalise your spending, some insurance might be more worthwile than others, are you getting the best value electricty/gas/tv package etc? More specific info on this area will be covered in future posts. It dosnt matter if your a captain of industry or his P.A. either way you owe it to yourself to get good value for the money you spend.
Step Three: Put your plan into Action
I would suggest starting each month with a clean slate.
Using your online banking facilities can really help you do this. Figure out what you need to put away each month for your fixed expenses, for example, if your managment fees are €1200 per year then you should set aside €100 every month to go twords this.
Set up a savings account with your bank or an online bank like RabboBank, either way it is easy to transfer the money for your fixed expenses to your savings account. This way the money is out of your current account and not immediatly available for you to spend. It also has the added benefit of earning you some interest and when that bill eventually lands on your lap, you are prepared.
If you had planned to save something then transfer it out of your current account on pay day as well.
If your a 'super saver' then also put any money you had left over from last month into your savings account, you would be amazed how fast your savings will grow if you do this.
A lot of gas and electricity bills are paid every two months, now you know your average monthly spend on these why not pay them on pay day too? Most utility companies allow you to pay a bill online, pay what you think you will owe every month in advance via Laser/Visa Debit, dont wait for the bill to arrive. So if you know you pay on average €160 every bill on electricity, then pay €80 every month, if it turns out that your final amount over the two months is less, then you dont have to pay as much next month. You can do the same with TV/Phone/Internet providers such as UPC.
The idea is that on the day you get paid you pay out whatever you need to pay. The amount you have left over is your spending money, you can adjust your spending accordingly.
If you have €600 left over after paying all your bills, fixed and variable, and its 30 days till your next pay day then you know you could spend €20 per day and your on target. Some days you wont spend anything and others you will spend a lot, just divide the number of days by the amount you have left in your current account and you will know how you are fareing. Your also safe in the knowledge that you have set aside your savings for the month so you will be well preared for your big expenses like car tax or insurance.
Everyones situation is different and it will be harder to estimate expenses for some but the basic idea remains, your income must at least meet your outgoings over a year or your in trouble. You may have to take drastic action but unless you have a true grasp on the figures you may be lulling yourself into a false sense of security.
FS
Welcome to Irish Money Saving Tips & Financial Advice
Welcome to my new Blog!
Over the coming weeks and months i want to share with you some money saving and budgeting tips that i have picked up on a professional and personal level over the years.
I will post regarding how best to manage your money and hopefully provide some personal insight into some of the news of the day in this post celtic tiger economy and society that we all inhabit.
FS
Over the coming weeks and months i want to share with you some money saving and budgeting tips that i have picked up on a professional and personal level over the years.
I will post regarding how best to manage your money and hopefully provide some personal insight into some of the news of the day in this post celtic tiger economy and society that we all inhabit.
FS