Q I was with my car insurance company recently and they asked me if I wanted to keep my full no-claims protection on my policy. I’ve never had a claim in 25 years of driving so I turned it down as it saved me €50. Now I’m wondering if it was the right thing to do. Is it worth having some level of protection?
A The main reason for the surcharge for no-claims protection is to protect your no-claims or claims discount. If you have never made or had a claim on your insurance, it is understandable that you would be reluctant to continue paying for a product that you have never benefited from, according to Insuremycars.ie Managing Director Jonathan Hehir.
But since there’s no way to tell whether or not you’ll ever need it, it’s very important to assess your own situation and see what makes the most sense for you, he said.
Perhaps instead of full protection, most insurers offer ‘step-back’ protection by default, meaning that if you did make a claim you would lose some of your no-claims bonus, but not all of it. In other words, it will revert to the previous year’s discount level.
For example, if you’ve taken a 55 percent discount and you’re entitled, your next renewal will roll back to a 35 percent discount on your award. If you had a 50 percent no claims bonus, it could be rolled back to 20 percent, Mr Hehir said. A good agent will help you compare no claims discounts to ensure you get the best deal on renewal each year.
Q I am in my early 60s and am considering life insurance for the first time. The main reason is that I want to leave something for my two children and also want to put some money aside for funeral expenses. Is it too late to start? What’s my best option?
A It’s never too late to make prudent financial decisions, and life insurance is one of the most trusted ways to provide for your loved ones after death, according to Paul Walsh, chief executive of People Insurance.
One option worth considering is term life insurance, which will cover you whether you’re leaving cash benefits for your family or want to make sure your end-of-life expenses are covered. Term life insurance protects you for a set number of years – ie a term – and pays a lump sum if you die before that specific future date.
Life insurance is one of the most trusted ways to provide for your loved ones after your death
Consider your current financial commitments and basic expenses, and determine what you can afford to put away. It’s also worth thinking about your family’s future financial needs and how you hope to support those or the costs associated with a funeral, Mr Walsh said. Keeping this in mind can help you figure out how much coverage you need and how long you might need it.
The higher the sum insured and the longer the term, the higher the costs. Look for a long-term plan, Mr Walsh added. It pays to enlist the help of a good broker to find the best product for your appropriate coverage level, he said.
Q My fiancee and I have recently returned from working abroad and would like to apply for a small mortgage. We’ve saved up a good chunk of our security deposit and have new jobs, but we’re concerned about our creditworthiness. Aside from a car loan and a student loan, we have little else to prove our ability to repay. Would we have a better chance at a bank or credit union as I hear credit unions are now offering mortgages as well?
A There are many ways to get a mortgage, and the advice from Kevin Johnson, chief executive officer of the Credit Union Development Association (CUDA), is to evaluate all of your options and fully consider their implications before making any decisions. While your credit history can be a hindrance, every situation is different.
You both seem like very good candidates, and there may be times when a lender will ask you to wait six months to demonstrate your ability to repay a mortgage loan.
Without full details, it’s difficult to tell if you would get a mortgage approval right away, but apply now. Preparation is of the utmost importance, so make sure you have all the required documentation.
All current account transactions in the last six to 12 months are considered as lenders should look for potential red flags such as online gambling.
You’ll find that credit unions want to help you and aren’t there to make a profit – so it stands to reason that their rates are competitive.
https://www.independent.ie/business/personal-finance/your-personal-finance-questions-is-it-worth-paying-for-extra-no-claims-cover-on-my-car-insurance-42013488.html Your personal financial questions – is additional no-claims protection worth it for my car insurance?