Life insurance is one of the simplest ways to protect your family, home, or business. Whether you’re safeguarding your mortgage, replacing income, planning for inheritance, or supporting business partners, the right cover offers peace of mind when life becomes uncertain.

This guide breaks down the main types of life insurance available in Ireland in plain English, making it easy to understand whether you’re new to insurance or reviewing your existing cover.

Life Cover Linked to Your Pension and Estate

When planning for retirement or how your assets will pass to the next generation, some life insurance options in Ireland link directly with pension planning or estate planning. These can offer tax efficiencies and help your family manage future financial responsibilities.

Pension Term Assurance
Pension Term Assurance runs alongside your retirement plan, typically until your chosen retirement age. A major advantage is that premiums may qualify for income tax relief, within Revenue limits. It’s particularly useful for self-employed individuals and company directors.

Section 72 Policy
A Section 72 policy is Revenue-approved for inheritance tax planning. When set up correctly, the payout can be used to pay Capital Acquisitions Tax (CAT) arising when family members inherit assets. This can help avoid the forced sale of property, investments, or business assets to cover a tax bill.

Whole-of-Life and Term Life Insurance

These are the most common forms of personal protection.

Term Life Insurance
Term life insurance covers you for a fixed number of years. If you die during the term, your beneficiaries receive a lump sum. It’s often used for mortgage protection, income replacement, childcare, education and general family security. It’s usually the most affordable option.

Whole-of-Life Insurance
Whole-of-life cover lasts for your entire lifetime. As long as premiums are maintained, a payout is guaranteed. It’s commonly used for inheritance planning, funeral costs and leaving long-term financial support. Premiums are higher, but the security is lifelong.

Protection Through Your Workplace

Many people have some level of cover through their employer, although it often ends when the job ends.

Group Life Insurance (Death-in-Service Benefit)
This is employer-provided cover that pays a tax-free lump sum, usually a multiple of salary, if you pass away while employed.

Key points:
No direct cost to employees
Ends when you leave the employer
Personal life cover is recommended for continuous protection

Life Insurance for Business Owners and the Self-Employed
Business protection is essential for companies that rely on key people or have shared ownership.

Types of Business Protection

Key Person Cover
Protects the business financially if a key employee or director dies.

Co-Director Insurance
Allows surviving directors to buy out a deceased partner’s shares.

Partnership Protection
Ensures continuity within a partnership and protects the value of the business.

Benefits for Irish Businesses
Maintains financial stability
Protects the deceased owner’s family
Supports smooth ownership transfer
Can be structured tax-efficiently

Why Protection Matters in Ireland

Irish households and businesses face rising pressures: higher living costs, high mortgage repayments, growing childcare/education expenses, and more people working for themselves without employer benefits. The right protection plan helps prevent short-term challenges from becoming long-term financial strain.

Frequently Asked Questions – Life Insurance Ireland

1. What is life insurance and why do I need it?

Life insurance provides a financial payout to your family or beneficiaries if you pass away. In Ireland, it can help cover essential costs such as mortgage repayments, childcare, education, everyday bills, debts, or business continuity.
You need life insurance to ensure your loved ones or business partners remain financially secure during life’s most challenging moments.

2. What are the main types of life insurance?

The most common types of life insurance include:

Term Life Insurance – Covers a specific period.

Whole of Life Insurance – Provides lifelong cover with a guaranteed payout.

Mortgage Protection Insurance – Pays off your mortgage if you die.

Income Protection Insurance – Replaces lost income if you can’t work due to illness or injury.

Critical Illness / Serious Illness Cover – Provides a lump sum if diagnosed with a specified illness.

Business Protection Policies – Includes Key Person Cover, Co-Director Insurance, Partnership Insurance.

Pension Term Insurance – Linked to pension arrangements.

Section 72 Policies – Tax-efficient life insurance options.

Group Life Insurance – Employer-provided coverage for employees.

Many families and business owners combine multiple policies for comprehensive protection.

3. What’s the difference between Term Life Insurance and Whole Life Insurance?

Term Life Insurance: Covers you for a fixed period (e.g., 20–30 years). Ideal for mortgages, raising children, or other time-specific commitments. More affordable than whole life cover.

Whole Life Insurance: Covers you for your entire life and guarantees a payout whenever you pass away. Often used for long-term security, estate planning, or leaving a tax-efficient legacy.

4. How much life insurance coverage do I need?

The right level of cover depends on:

Your income
Outstanding debts (e.g., mortgage)
Number of dependents
Future financial goals (e.g., education costs)
Household expenses and lifestyle

In Ireland, many families aim for 5+ times their annual income, while business owners may require higher cover to protect loans, shareholders, or key staff.

A personalised assessment with a Qualified financial advisor ensures your cover matches your actual needs.

5. What factors affect life insurance premiums?

Premiums depend on:

Age
Health and medical history
Smoker status
Occupation
Policy type and coverage amount
Policy term

In 2025, insurers also increasingly consider lifestyle factors such as activity levels and family medical history.

6. Can I get life insurance with pre-existing medical conditions?

Yes. Conditions like diabetes, asthma, high blood pressure, depression, or previous cancer diagnoses do not automatically disqualify you.

Insurers may apply:
Higher premiums
Exclusions
Additional medical underwriting

Working with an experienced broker, such as Donnelly Financial Planning, can help you find the most suitable provider for your health profile.

7. What’s the difference between Life Insurance and Mortgage Protection Insurance?

Life Insurance: Pays a lump sum to your family or beneficiaries for any purpose—debt repayment, income replacement, childcare, education, or long-term security.

Mortgage Protection Insurance: Specifically designed to pay off your mortgage balance if you pass away. The payout decreases over time as your mortgage reduces and is typically required by Irish lenders.

In Ireland, many families choose both: mortgage protection for the home and life insurance for broader financial security.

Talk to a Financial Advisor

Stephen Donnelly (QFA, RPA) at Donnelly Financial Planning can provide personalised advice to help you choose the right policy for your home, family, or business.

Author: Stephen Donnelly, QFA, RPA, Managing Director, Donnelly Financial Planning Ltd
Regulated by the Central Bank of Ireland

Disclaimer:

This article is for general guidance only and does not constitute financial advice. Please consult a regulated financial advisor for personalised recommendations.
Donnelly Financial Planning Ltd is regulated by the Central Bank of Ireland.