Category: Life Insurance

💡 What is a Life of Another policy?

It’s a life insurance policy taken out by one person on the life of another — often used when there’s a financial connection, such as a shared mortgage, business partnership, or inheritance planning need.

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🟢 When is it relevant?

• 🏡 Cohabiting couples – To help cover potential inheritance tax if one partner dies and the property is jointly owned.

• 🤝 Business partners – To provide funds if a partner passes away, supporting business continuity or a buyout.

• 🧾 Inheritance tax planning – Especially for high-value estates or when the Dwelling House Exemption doesn’t apply.

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📊 Why it matters

🔴 The inheritance tax threshold for cohabiting partners (Group C) is only €20,000

🔴 Anything above that is taxed at 33%

🔴 Without planning, a surviving partner could owe tens of thousands in tax

🔴 A Life of Another policy — when structured correctly — can help cover this liability tax-free

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📘 Example scenario

Mike and Sarah are an unmarried couple who jointly own a €400,000 home. If Mike dies, Sarah inherits his 50% (€200,000). With a CAT threshold of €20,000, she could owe 33% on €180,000 — that’s €59,400 in tax. But if Sarah owns and pays for a Life of Another policy on Mike, the payout is hers — tax-free — and can be used to pay the liability.

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🛠 How to structure it properly

✔️ Each person owns and pays for the policy on the other

✔️ Use individual (not joint) accounts for premium payments

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🧩 Other considerations

Already have mortgage protection cover in place? No problem — we can help you review your current setup and explore whether a Life of Another policy could complement your broader protection plan.

Every client’s situation is unique, and the right structure depends on a range of factors — from relationship status to property ownership and inheritance goals.

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✅ Talk to us

If you think this might apply to you or someone you love, reach out today. We’ll walk you through it — jargon-free — and make sure your cover is doing exactly what it should.

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Introduction
As a financial advisor, one of the most frequent questions I encounter from Irish parents is whether life insurance is truly necessary. Many believe that life insurance is either too costly or simply not needed. In this blog, I aim to dispel these misconceptions and highlight the critical role life insurance plays in securing your family’s financial future.

Common Misconceptions About Life Insurance
Many parents in Ireland believe that life insurance is unnecessary or too costly. However, this couldn’t be further from the truth. Life insurance for parents is a crucial step in securing your family’s financial future, especially if you have children who depend on your income.

The Safety Net You Didn’t Know You Needed
Imagine an unforeseen event leaving your family without your support. Irish life insurance acts as a safety net, ensuring that your loved ones can maintain their standard of living, cover educational expenses, and handle day-to-day costs without financial strain. The benefits of life insurance extend far beyond immediate financial relief; it provides long-term security and peace of mind.

Real-Life Scenarios That Call for Protection
Take, for example, the O’Connor family. When the primary breadwinner unexpectedly passed away, their life insurance policy provided the funds needed to keep the children in school and pay off the mortgage, alleviating financial worries during a challenging time. This real-life scenario underscores the importance of protecting your family’s future.

Conclusion
Life insurance is not just a policy; it’s a promise to your loved ones that they will be taken care of, no matter what happens. We recommend considering life insurance as a foundational element of your financial planning.

Don’t leave your family’s future to chance. Visit beatthebank.ie to secure the best life insurance quote for your needs.