“Everybody has a plan until they get punched in the mouth.”
— Mike Tyson
I often use that Tyson quote when I’m talking to clients, because it captures something quite uncomfortable but very real.
We all assume the plan will work out.
But life insurance only exists for the day the plan gets tested.
So imagine we’ve sat down together. We’ve talked through your income, your mortgage, your kids, and what life would look like if you weren’t there. We run the numbers and we agree that €1m of cover feels right. You’re comfortable with the premium, we put it in place, and we move on with life.
Now fast forward two years.
You’re gone.
Aren’t You Lucky You Took Out Life Insurance?
Your wife never expected to receive €1,000,000.
There’s guilt attached to it, which is completely normal. There’s shock and also exhaustion.
And then, fairly quickly, there’s reality.
Your youngest is two, which means that money needs to stretch for more than twenty years.
You had agreed that if one of you died, the other would stop working and focus on raising the children. The plan was always to invest the lump sum and draw an income from it and it made sense when you discussed it calmly over a coffee.
But money was your thing, not hers.
And now she’s sitting at the kitchen table thinking,
“Can I actually handle this? Who do I trust? What if I invest it badly? What if markets fall? I don’t need this stress right now.”
That isn’t an irrational fear.
I’ve seen versions of it before.
During the Celtic Tiger years, families received significant life insurance payouts and were advised to invest much of the money into Irish bank shares because, at the time, that advice seemed sensible. The banks were profitable, paying dividends, and widely viewed as stable institutions.
It didn’t feel like a gamble.
But when 2008 came along, everything changed very quickly. Bank shares fell sharply, portfolios shrank, and families who believed they had long-term security suddenly found themselves reassessing their plans.
Those people weren’t reckless. They weren’t chasing risk. They were grieving, trying to do the responsible thing, and relying on advice that appeared reasonable in the moment.
And that’s the part that often gets overlooked.
A lump sum doesn’t just provide security; it creates responsibility. It creates decisions about where to invest, how much to withdraw, and how long it needs to last.
And those decisions arrive at a time when the surviving partner already has more pressing responsibilities – children to raise, routines to maintain, paperwork to manage, and life to hold together.
So the real question isn’t simply whether €1m is enough.
It’s whether you want your partner managing €1m at the hardest moment of their life.
An Alternative to the Lump Sum
Life insurance does not have to pay one large cheque.
In Ireland, it can be structured to pay a monthly income instead. In the UK this is known as Family Income Benefit, but the principle is the same.
Rather than handing over capital and asking someone to manage it, the policy replaces income month by month.
Let’s say we calculate that your family would be short €3,000 per month if you died. If your youngest is three years old, we could arrange a policy that pays €3,000 per month until that child turns 25.
If the worst happens, your partner doesn’t receive a lump sum to invest. Instead, €3,000 arrives in the account every month, just like your income used to.
There’s no capital to manage, no investment strategy to design, and no pressure to make the right call at the wrong time. The structure does the work.
When Monthly Income Makes Sense
In my experience, this approach works particularly well where one parent would realistically stop working if the other died, and where the surviving partner would prefer steady income over managing a large investment pot. It suits families who value predictability and simplicity, and who want to remove as many financial decisions as possible from an already overwhelming situation.
When Lump Sum May Be More Appropriate
On the other hand, lump sum cover can be the better fit where there are complex debts to clear, business interests involved, or where the surviving partner is financially confident and comfortable managing capital.
Some families genuinely prefer flexibility, and that’s perfectly reasonable.
The key point is that this isn’t about clever product design. It’s about knowing your family and thinking realistically about how things would unfold.
Which Insurers Offer This in Ireland?
At the moment, only New Ireland and Zurich Life offer monthly income life insurance structures in Ireland. So if this is the route you want to explore, insurer choice becomes more focused from the outset.
Final Thought
Most advisors default to lump sum cover because it’s straightforward and widely understood. Monthly income life insurance is less common, but for certain families it provides a calmer and more structured outcome.
It can remove a layer of financial responsibility at a time when there are already enough responsibilities to carry.
If this resonates with you, we can look at both structures side by side and decide which fits your family best.
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Thanks for reading,
Nick
Editor’s note: First published in 2020 and updated to reflect current Irish insurer structures.