Written answers
Tuesday, 21 October 2025
Department of Finance
Consumer Protection
Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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314. To ask the Minister for Finance if he is aware of the growing number of elderly people whose life assurance policies are becoming unaffordable due to annual premium increases; if he will outline what consumer protections currently exist for persons over the age of 70 who have paid premiums for decades but now face either the loss of their policy or sharply reduced cover; if his Department has engaged with the Central Bank regarding this matter [57256/25]
Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, neither I as Minister for Finance nor the Central Bank of Ireland can intervene in the provision or pricing of insurance products. These are commercial decisions taken by insurers in line with EU law, specifically the Solvency II Directive, which sets out the framework for insurance within the Single Market.
‘Whole-of-life’ insurance policy provides a policyholder with life cover for their whole life as long as the policyholder makes regular payments and the payments are sufficient to maintain the chosen benefits. This type of insurance policy will pay a lump sum on the death of the policyholder. Regular payments into the plan cover the cost of providing the benefits chosen. In the early years of such a plan, payments are higher than the cost of the policyholder’s benefits, with the extra monies paid invested into the plan’s fund. However, protection benefits get more expensive as policyholders get older and the risk of death increases.
For later years of reviewable whole-of-life policies, the cost of the benefits/life cover increases significantly, and in order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.
An insurance company will carry out regular reviews of these plans to see if the consumer’s regular premium, plus any fund which has been built up, is enough to cover their chosen benefits for their reviewable protection plan. These reviews usually take place every 5 years. However, for older lives assured (70 years and upwards), these reviews make take place every year.
During such a review, the life firm will consider whether the premium being paid is sufficient to maintain the cover on the policy until the next review date. If the insurer establishes that the premium is insufficient to maintain the cover as a result of the review, the policyholder is usually given the following options:
- Pay an increased premium in order to keep the current levels of cover on the policy;
- Reduce the cover on the policy to a level which can be supported by the current premium.
In addition, it is the Central Bank of Ireland’s expectation that when consumers are sold any product, including unit linked whole-of-life insurance, that the risks of that product are fully explained to the customer. In order to avoid mis-selling, the sale of insurance products should always be accompanied by a demands-and-needs test on the basis of information obtained from the customer. When undertaking a suitability assessment, regulated firms must ensure that the product or service is consistent with the consumer’s investment objectives, as well as attitude to risk.
Any consumer who is dissatisfied with the service they have received from their insurance provider should make a formal complaint, and thereby give the provider an opportunity to resolve the issue. When this process has been completed, a consumer may then complain to the Financial Services and Pensions Ombudsman (FSPO) if they are not satisfied with the final response. The FSPO is a statutory office that acts as an independent arbiter of disputes which consumers may have with their financial service provider.
Consumers may also wish to directly contact Insurance Ireland, the official industry body, which provides an Insurance Information Service to assist those experiencing difficulties with insurance coverage or claims. This service can be reached by calling 01-676-1820 or emailing feedback@insuranceireland.eu.
Additionally, Brokers Ireland can offer advice and access to a wide range of insurance products and providers, helping consumers to identify suitable cover. They can be contacted at 01-661-3067 or via insurancequeries@brokersireland.ie.
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