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Becoming a mother is one of the biggest moments in a woman’s life - and also one of the most daunting, with the responsibilities and the sense of mortality it brings.
After giving birth, it can be almost unbearable to imagine not seeing your little one grow up. But, sadly, the Child Bereavement Network estimates that, every day, 112 children in the UK are bereaved of a parent and by the age of 16, one in 20 children will have lost one or both parents.
None of us likes to think we will be a statistic, but settling into a routine with your newborn can be a good time to take stock, plan for the future and even think about making a will. Your financial planning might also include taking out life insurance for parents.
What is life insurance?
Life insurance provides a lump sum to your named beneficiaries in the event of your death. It can be used to pay off the family mortgage and other debt, or to meet the rent and household bills while your partner takes some time off to adjust and look after your children. There is no stipulation as to how the lump sum is spent, leaving your family free to use it in the way that best helps them.
Life insurance for working mothers
If you are in work and plan to go back, you might already have life insurance as part of your employee benefits package. Sometimes called death in service insurance, it’s designed to provide a payout for your family in the event of your death, which needn’t occur at work for the lump sum to be paid.
You might find, however, that taking maternity leave, reducing your hours on your return or taking a career break has an impact on your staff benefits and that you need to look into additional life cover. You might want to increase the sum insured to take into account any potential earnings had you not had a baby, or to factor in the cost of your additional contribution to the home in terms of childcare and chores.
Life insurance for at-home mums
At-home parents often believe that they don’t need life insurance as they are not bringing in an income, but this could put their family at risk financially if they were to pass away.
The contribution to the home made by a non-working parent adds up significantly. Recent research from our partner Scottish Widows found that, on average, mums spend almost 23 hours a week on housework and chores, including cooking, helping children with homework and doing the school run, as well as laundry and cleaning.
In the event of your death, your partner or another relative might have to give up work or reduce their hours to take on these aspects of family life. Having the right life insurance in place can help to replace their income until the youngest child leaves home, giving your family security when it’s most needed.
Life insurance for young mums
If you become a mum in your teens, 20s or 30s, you might feel too young to start thinking about life insurance. In fact, the younger you are when you take out a policy, the better. Buying life cover at this age can prove considerably cheaper than if you wait until your 40s or 50s as, the younger you are, the lower the premiums tend to be.
The cost of life insurance is calculated on a number of factors, your age being one of them. After the age of 30, you’re statistically more likely to get a range of conditions such as high blood pressure and cholesterol. Other factors that can reduce your premiums include stopping smoking and taking regular exercise.
Life insurance for couples
Whether you’re a solo mum or in a couple, you can take out single life insurance or joint life cover. Joint life insurance can often be cheaper than taking out two policies and can reduce the amount of paperwork.
Remember, however, that it only pays out on the first death, leaving the surviving parent in need of a new policy. A joint policy can also take some untangling should you separate or divorce.
What life insurance is best for mums?
Term life insurance comes as level term insurance - where the premiums and the potential lump sum pay-out remain the same for the duration of the policy - and decreasing term insurance, where the sum insured reduces as the term goes on. This type of policy can be useful for paying off a decreasing outgoing, such as a mortgage.
Whole of life insurance is also known as life assurance and runs for the entirety of your life. A pay out is therefore guaranteed, but the premiums might be more pricey as a result.
To find the best life insurance for mums, use our online comparison service or call our team on 0800 862 0949.