In most but not all circumstances life assurance is only necessary when you don’t have sufficient capital or income to survive without the deceased being around any more, although a French policy know as an “Assurance Vie” can be of great benefit what ever your circumstances for inheritance tax planning especially if you are intending on leaving an inheritance to a non blood relative.

However the average thirty/forty something couple with children are unlikely to have sufficient capital to deal with the prospect of one of the parents dying even if the house is paid off by the policy with the mortgage, so they are likely to need some protection against something happening to one of the parents. For example if the father earns €50,000 each year, and the spouse works a few hours a week part time and looks after the children. If the father was to die she would be €50,000 a year worse off, does she need life assurance? I think we can see what the logical answer is going to be. What if it was the mother died before the father? He would now have to arrange daytime child care for the children, as well as probably also needing to pay for some assistance with the day to day maintenance of the home so there is also a strong case for covering the spouse as well.

The fact remains that very few people are planning on dying right now so why introduce another bill? Let’s look at some numbers. How much does it cost to cover an average family car for a 35 year old? Before being bombarded with quotes, let’s say it’s €500 per year. What benefit is being covered? Around €15,000, so for €500 p.a. one receives €15,000 cover. How much buildings insurance and contents cover could you get for €500 p.a.? I will guess at €150,000 buildings and €50,000 contents. This seems to be a better deal than the car at least. With both of the examples above, the choice is not really given as you must have car insurance and most people want the security of having buildings and contents insurance.

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