The Tangible Benefits of Shopping Around for Pension Products

February 4th, 2010

It was reported today that a typical pension fund could increase in value by 17% if the individual shopped around for better value (article here).

SmartQuotes.ie offer some of the lowest cost pension products on the market without having to compromise on quality of service and fund choice.  Products from large insurers such as Aviva, Zurich, New Ireland, Friends First, Irish Life and Canada Life are offered.

SmartQuotes.ie offer up to 100% allocation of funds* so all your invested funds make it into your pension. We also offer competitive charging structures.  SmartQuotes.ie also provides clients with quarterly updates on their funds performance keeping clients informed of their investment returns.

* subject to terms and conditions

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Up To 70% Discount On Life Assurance Offer Extended!

February 1st, 2010

SmartQuotes.ie has extended its discount for life assurance worth up to an incredible 70% of your first annual premium until 31 March 2010!

Unlike other providers, SmartQuotes.ie are offering this discount to our monthly premium payers.

Click here for a quote!

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Negative Equity

January 28th, 2010

There is currently a lot of press coverage about negative equity. We thought it would be worthwhile to do a quick overview of this for illustrative purposes.

In November 2008 the average mortgage was €259,217. This was most likely borrowed at 90% loan to value, resulting in a property purchase price of €288,801.  According to Ronan Lyons (Economist with Daft.ie) prices across Dublin (as an example) are down 35%.

This would imply a house value of €187,994 and negative equity in the above example of €71,223.

The mortgage we assume was taken out on 1/11/2008 and the outstanding capital balance is €252,843 at 31/12/2009.

If someone is fortunate enough to have a job in the current climate they are benefiting from the lower ECB rates.  Since November 2008 base rates have gone from 3.75% to 1%.  This would result in a monthly saving of approx €575 per month.

If we assume that rates are going to stay the same for 2010 and increase by 1% in 2011 and another 1% in 2012 then the monthly savings will be as follows:

-2010 – €575 per month

-2011 – €375 per month

-2012 – €150 per month

For the purposes of this exercise lets assume that someone who still has a job and is benefiting from lower interest rate commits to putting €500 into a regular saving account. Hibernian Aviva have announced an excellent new product available from SmartQuotes.ie which allows 100% allocation, low management charge of 1.25% and no penalty for exiting early.

Over three years assuming a 4% return would result in a lump sum at the end of 3 years of €18k.  This combined with capital repayments of circa €14k would result in a lump sum of €32k.  This would clear 45% of your negative equity in under three years.

Contact SmartQuotes.ie to find out more about the Regular Savings Plan from Hibernian Aviva.

Assumptions:

-30 year mortgage (Capital and Interest)

-Interest rate over the next two years of 2.5%

-Ignores mortgage interest relief

Regular saver return from Aviva estimated at net 4% (after charges).  This is an estimate and actual performance will depend on fund choice

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Free Life Assurance for New Parents!

January 27th, 2010

It’s great news for new parents – and a golden opportunity for you! Under a new initiative, Aviva (formerly Hibernian Aviva) will provide €10,000 of FREE life cover for each parent of a baby under 6 months old. The cover will run until the child’s first birthday.

  • There are no hidden catches.
  • No payment is needed.
  • Applications are made on-line.
  • No bank or credit card details required.

Why are Aviva making such a unique offer?

Our offer is designed to help people start thinking about their protection needs, to safeguard the financial future of their families. With 40% of Irish adults* holding no life cover at all, there’s a significant gap in the market – and people are being exposed to unnecessary financial risks.

How do I apply?

Simply complete the Contact Us form here to request an application form.

One of our team will send you out the required paperwork within 24 hours.

www.smartquotes.ie

*Source: Millward Brown Lansdowne – Aviva Brand Tracker 2009.

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How much does life cover cost for over 50’s?

January 26th, 2010

There are a lot of products out in the market aimed at the over 50’s. While some of these are good products there are lower cost alternatives available to individuals with no major health issues.  For illustrative purposes €200,000 life cover for a 50 year old male for 15 years (i.e. until retirement) would cost €57.32 per month.

For individuals over 50’s life assurance may be an important consideration for a number of reasons such as:

  • Children still in full time education
  • Business loans that are not yet paid off
  • Negative equity on an investment property (if the property is sold the amount may not cover the loan)
  • Other loans
  • Drop in accumulated pension funds therefore reducing benefits for a spouse in the event of death

Based on the above details the underwriting requirements are a report from GP on your medical history. In a lot of cases a report from your GP should address these issues without the need for a full medical, providing no major health issues are raised. Obviously due to the nature of the cover each case is different therefore the above should only be considered as being for illustrative purposes.

SmartQuotes.ie are offering up to a 70% discount on the first years premium resulting in the monthly outgoing for the first 12 months reducing to €17.20 per month.  SmartQuotes.ie have agencies with all the major insurers including Aviva, Canada Life, New Ireland, Hibernian and Zurich.

Contact SmartQuotes.ie to obtain a quote on your over 50’s Life Assurance

Assumptions:

  • Male Non Smoker DOB 20/1/1960
  • Cover €200k for 15 years (i.e. to normal retirement age)
  • Non convertible

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How Much Wedding Insurance Do You Need?

January 18th, 2010

There are four different types of wedding insurance offered by
SmartQuotes.ie

We thought it would be beneficial to take a sample wedding of 150 people and see what a suitable level of insurance would be.  We used the main costs for the purposes of this exercise and other costs should be considered.

Description € Before or After € Paid before Note
Drink 3,600 After - No Note
Hotel – Food etc 15,000 Both 10,500 Probably 70% before
Dress 3,000 Before 3,000 No Note
Make up and Hair 600 Both 300 Probably 50% deposit
Flowers 1,500 Both 750 Probably 50% deposit
Band 3,000 Both 1,500 Probably 50% deposit
Photography 1,500 Both 750 Probably 50% deposit
Video 1,500 Both 750 Probably 50% deposit
Church & Music 1,000 After No Note
Cars 1,000 Both 500 Probably 50% deposit
Suit Hire 750 Both 375 Probably 50% deposit
Cake 500 Both 250 Probably 50% deposit
Rings 1,000 Both 500 Probably 50% deposit
Other 5,000 Both 2,500 Probably 50% deposit
Totals 20,350 11,175

In the case of the above example the suitable plan would be the 3* at a cost of €99 which would cover most of the costs paid in advance of the wedding. This would offer failure of supplier cover up to €5,000 which an option to increase this to €10,000 at a cost of an additional  €29.  In the current economic environment this may be worthwhile considering for peace of mind.

SmartQuotes.ie offer wedding insurance from €69.99. Click here.

“All figures are correct at the time of publishing.  These figures are for illustrative purposes only.  If Financial Advice is required you should contact SmartQuotes (trading name of PFP Financial Services Limited”

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Life Assurance Terms Explained

January 13th, 2010

We are often asked to explain the jargon associated with life assurance.

There are two main types of mainstream life cover:

Mortgage Protection (also known as mortgage life cover)

Life Assurance (also known as term assurance)

The difference between a mortgage protection policy and life assurance is that a life assurance policy pays out an agreed lump sum to a surviving spouse or family on the death of the policyholder. A mortgage protection policy pays off the remaining balance on a mortgage loan to the bank if the policyholder dies before the mortgage is paid off.

It is important to realise that with life assurance the sum assured does not decrease, whereas with mortgage protection the sum assured decreases because the sum assured is equal to the balance on the mortgage loan account.

Most people who have a mortgage will have mortgage protection.

Mortgage Protection should not be confused with mortgage repayment protection which pays your mortgage for 12 months if you lose your job etc.

For life assurance there are two main types of cover dual cover and joint cover.  Dual Life Cover is a life insurance policy that provides cover for two people and continues after the first person dies. It pays out benefits on each death.  It could potentially pay out twice during the course of the policy. Joint cover will pay benefits on the first death of either insured person.  As a result joint life cover is usually cheaper.  All mortgage protection cover by nature is joint cover

There are also other options when taking out a life assurance policy:

-         Convertible option

-         Indexation

Convertible option – At the end of the term you have chosen you have the option to continue your life cover without the need for further medical information.

Indexation – This option allows you to increase your life cover in line with inflation. The indexation rates vary between providers and clients should always ask what indexation rate applies to their premium and their benefits.

SmartQuotes.ie compares the market to find the cheapest life assurance/ mortgage protection quote for you.

www.smartquotes.ie

For further jargon translations a useful website is http://www.itsyourmoney.ie/jargonbuster

All text/figures are correct at the time of publishing.  Figures are for illustrative purposes only.  If Financial Advice is required you should contact SmartQuotes (trading name of PFP Financial Services Limited).

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The Reduced Cost of Life Assurance/ Mortgage Protection

January 11th, 2010

Life assurance costs have reduced in the past few years mainly as a result of increased competition in the market. For illustration purposes we thought it might be worthwhile to examine this for both life assurance and mortgage protection (also known as life assurance for your mortgage)

A mortgage protection policy for a couple (male aged 27 smoker, female aged 28 non smoker) in the amount of €522,500 over 35 years cost €57.24 per month in 2007. Today it costs €54.19 per month. A reduction of 5.3%.

A life assurance policy for the same couple (dual life, convertible term, indexation) over 25 years would have costs €37.87 in 2006. Today it costs €33.73 per month.  A reduction of 11% per month.

The above demonstrates the possible savings to be made by shopping around. Go to our life insurance quote generator to obtain a quote in a few easy steps.

SmartQuotes.ie can provide you with a real time quote for cheap life assurance or cheap mortgage protection.  Why not go on our site and compare against the cost of your existing cover.  In addition to providing the lowest quote by comparing all the market providers we also currently offer up to 70% rebate on the first year’s premium.

Finding based on the comparison on one sample life assurance quote and one sample mortgage protection quote. Different circumstances may obtain different results.

All figures are correct at the time of publishing.  These figures are for illustrative purposes only.  If Financial Advice is required you should contact SmartQuotes (trading name of PFP Financial Services Limited

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Reducing Currency Costs in Business with Blue FX Markets

January 7th, 2010

When thinking about overseas investments it is essential to think about currency as this can ‘make or break’ your returns. Blue FX Markets are Ireland’s leading specialist foreign exchange business and can help you save significant amounts when purchasing currency for your overseas properties, investments or other purchases such as cars, machinery etc.

For example, one recent client bought £50,000 for a UK investment and saved £780 on the exchange rate and fees when using Blue FX Markets rather than going to their bank.

Niall Haughey, Founding Director, said that “Time and time again, we get business owners and individuals who need to buy large amounts of Sterling or US Dollars and are being taken advantage of by the banks – some might as well buy their currency at the Airport! It’s simple – if your purchasing large amounts of currency then use Blue FX Markets and we will save you money and hassle.”

Time is also saved on transfers as banks can take weeks just to transfer money, whereas Blue FX Markets can do it in a matter of hours.

www.bluefxmarkets.com


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PRSA’s Explained

January 7th, 2010

A Personal Retirement Savings Account (“PRSA”) is a retirement savings account designed to enable you to save for retirement in a more flexible manner.  A PRSA is a contract between you and a PRSA provider in the form of an investment account.

PRSAs allow you to change employment and continue to use the same PRSA. This is especially important these days as job changes during your career are more frequent then they previously were. You can also switch from one PRSA to another at any time, free of charge.

Tax relief is currently available on personal contributions to PRSA’s in the same way as normal personal contributions to either a personal pension plan or an employer sponsored scheme. Your employer may also contribute to your PRSA subject to overall limits.

By way of an illustration we have used an example below where the net cost to the employee (assuming tax relief at the higher rate) is €424 per month. This individual starts his PRSA at aged 30.

€
Monthly savings amount                  800
Cost net of tax relief *                424
Total savings at retirement      1,240,000

Using an annuity rate of 4%, this fund would produce a pension in the region of €49,787 per annum to fund your retirement.  You could also benefit from taking a tax free lump sum on retirement (based on current rules)

Further assumptions:

Allocation rate of 99%

Salary of 48,000 and max allowable contributions

Monthly management charges from 1.5% not included (dependant on fund choice)
Rate of return assumed at 5% per annum
Premium increases at 3% per annum

The employer may contribute but is under no obligation to do so.  The employer must allow you access to PRSA’s who are no entitled to join an employer pension scheme or if an employer scheme does not exist.

If you wish to avail of a low cost PRSA contact SmartQuotes.ie for a free no obligation review.

All figures are correct at the time of publishing.  These figures are for illustrative purposes only.  If Financial Advice is required you should contact SmartQuotes (trading name of PFP Financial Services Limited)

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