Am I getting good value from my life insurance? How actuaries measure it

The yardstick, in plain English

The money's-worth ratio is not about whether you personally will claim — nobody knows that in advance, and the uncertainty is the whole reason cover exists. It is an expected-value measure: across every possible outcome, weighted by likelihood, how much of the money going in comes back out as benefit? A ratio at or above 0.90 is the conventional boundary of fair value; the remainder covers the genuine costs of running the pool — administration, distribution, and the regulatory capital that makes the promise bankable.

The test, applied

Working Paper MWP-2026-04 priced a complete pooled protection design from first principles and held it against the 0.90 floor. Three results deserve every buyer's attention.

First, the design itself was strikingly generous. With distribution costs stripped out entirely, it returned €1.05 of expected benefit for every €1 of premium — a ratio of 1.046. Pooling does not merely recycle money; it creates value, because the premiums of members who never claim concentrate onto the members who do.

Second, a sensibly structured version of the product — carrying a real-world cost structure sized to the contract — cleared the floor comfortably at 0.934, with more than three points of headroom.

Third, and most instructive: the identical product carrying a heavy, wrong-sized cost structure came in at 0.895 — a whisker under the bar. Same cover, same pool, same benefits. The only difference was how it was structured and sold. Value is decided less by the product than by the way it reaches you.

The three levers a buyer controls

The research points directly at what moves value in practice.

The first is the price for your profile. The five Irish life offices price the same applicant differently, and the gaps can be substantial — our separate research on the bank premium shows how much buying through the first convenient channel can cost. Comparing the whole market before signing is the single biggest value lever a buyer has.

The second is the shape of the cover: the right sum, the right term, the right structure, so that no premium is spent on protection you do not need. A policy matched to your actual exposure — the mortgage balance, the years until the children are independent — wastes nothing.

The third is the review habit. Mortgages shrink, smokers quit, rates move — and because Irish term assurance carries no exit fees, a free re-comparison at every life event keeps you on the right side of the ratio for the whole term.

The bottom line

The Irish protection market is capable of delivering genuinely fair value — the research shows the design clearing the actuarial bar with room to spare — and whole-of-market comparison is how an individual buyer collects that value in practice.