Life insurance for parents

If you have dependants who rely on you financially, putting the right kind of life insurance in place can bring peace of mind to the whole family. Dependants could include your spouse or partner and siblings, but many of us take out life cover as parents, to ensure our children will be protected in the event of our death.

What is life insurance for parents?

We all wish to provide the best for our children, such as a stable and comfortable home, a range of activities and hobbies and, for many, the chance to go to university. We may also wish to buy their first car or help them onto the property ladder.

While you might rely on your salary to do this, should you pass away before marking these milestones, your child or children might not be able to have some of the things you assumed they would. Life insurance for parents pays out a cash lump sum if you die, enabling them to have the lifestyle you want to provide.

Do I need life insurance?

This depends on your family's own individual circumstances and on things such as whether your mortgage has been paid off and how much you have put away in savings.

Your employer may provide death in service cover as part of your staff benefits. Some companies offer a very good package, meaning that if you stay with the firm for the majority of your career, you may not need additional life cover.

If, however, you leave the business, you will lose this benefit. Remember that the earlier you take out these types of insurance, the cheaper they tend to be - so if you switch jobs in your 40s or 50s, you might find the premiums more expensive.

I’m not the main breadwinner: do I need life insurance?

It’s a common assumption that if you work part time or are an at-home parent, you don’t need to take out life insurance. Sadly, this leaves families very much at risk should anything happen unexpectedly. The surviving parent, or perhaps grandparents, aunts or uncles, might need to give up work to care for the children. If they are able to remain in work, they might need to pay for extra support such as cleaning, childcare and after-school clubs. Having the right life insurance in place will allow them to focus on supporting the children through bereavement, without having to worry about paying the bills.

Should parents get joint life insurance?

Joint life insurance can be a good idea for married parents, civil partners and live-in partners, with the premiums often proving cheaper than those for two single policies.

Remember, however, that most joint life insurance policies pay out only once, on the first death, leaving the surviving parent potentially without cover and needing to take out a new policy. Also, however much you might think as new parents that you’ll remain with your partner for life, break-ups and divorce do happen and two single policies can make things easier when separating the finances.

Life insurance for solo parents

Solo mums and dads should also think about who would take care of their children should they pass away and put the right financial cover in place to ensure this happens. It’s also essential to make a will setting out your wishes, in order to prevent potential disputes between relatives. The best time to make these plans is when you’re well, to ensure the best interests of your children are met.

Can I take out life insurance for my parents?

If you have older parents, you might worry that, when they have gone, you won’t be able to pay off their debts, such as outstanding mortgage payments, or meet their funeral expenses. These kinds of worries can add to your sadness and grief at the thought of their loss.

You can get life insurance for elderly parents should their death leave you with a financial loss, called 'insurable interest'. The key thing to note is that you must have their permission if you wish to take out an insurance policy in their name.

Again, talking to your family about death can be hard, but putting in place a will, critical illness cover and the right life insurance for parents can help ease the practical pressures and allow you to focus on your memories. We offer life insurance for the over 50s, as well as whole of life insurance, which is also known as life assurance.

To compare life insurance for parents and find the right policy for you and your partner, use our online quotes tool or speak to our team on 0800 862 0373.

Types of life insurance for mums, dads, and stay-at-home parents

As a parent, life insurance can offer crucial financial protection for your children. There are several life insurance options to consider:

Level term life insurance:

This policy is set for an agreed period (e.g. 30 years) and pays out a fixed sum to your beneficiaries. The amount of cover depends on the premium you’re willing to pay each month.

Decreasing term life insurance:

This policy also runs for a specific period, but the payout decreases over time. For instance, if you pass away after 5 years, the payout would be higher than if you died after 20 years. This type of insurance is often used to cover a repayment mortgage, with the potential payout decreasing in line with the outstanding mortgage balance. It could be the best life insurance for young parents as it is typically the most affordable and offers maximum protection when the child is most vulnerable.

Whole of life insurance

This type of cover is generally the most expensive because it guarantees a payout. As long as you keep up with the monthly payments, you’re covered for the rest of your life for a fixed amount.

Joint life insurance

If you’re part of a couple, a joint life insurance policy will cover both of you but only pays out once. It is designed to provide financial security to the surviving parent/partner. This option is cheaper than getting separate policies for each person but offers only one payout.

Death in service

This benefit applies to working parents and is an employee benefit offered by some workplaces. It functions similarly to a life insurance policy, and you may already have this cover if your employer provides it. However, death in service cover only applies while you’re working for that company. If you change jobs or leave work to become a stay-at-home parent, you’ll no longer be covered.

Life insurance for parents FAQs

Can I apply for life insurance whilst pregnant?

If you’re applying for life insurance while pregnant, there's no need to worry about it affecting your premiums. Pregnancy is not treated the same as other medical conditions that might impact your policy, such as chronic conditions like diabetes.

During your application, you’ll be asked various health-related questions. Factors like your weight, alcohol consumption, and smoking habits will be considered when calculating your premiums.

Regarding your weight, it’s natural to gain weight during pregnancy, so you should provide your pre-pregnancy weight.

For alcohol consumption, you may be asked about both your current drinking habits and your history of alcohol use. Answer honestly.

Lastly, for smoking, life insurance providers will classify you as a non-smoker only if you haven’t smoked in the last 12 months. If you’ve quit smoking solely for the duration of your pregnancy, that won’t be sufficient. E-cigarettes and other nicotine products, like patches, are also considered.

What happens if I have more children?

Some life insurance policies offer flexibility to adapt to changing personal circumstances. For instance, having more children or moving to a larger home can trigger a special event option, allowing you to increase the sum assured without additional underwriting. However, this increase will be reflected in your premium costs.

If a special event option isn’t available, you do have other options. You could cancel your existing cover and take out a new policy, or you could keep your existing policy and take out a second policy to bridge the coverage gap.

Life insurance for young parents

Even though it is not uncommon for people to become parents when they are teenagers, you cannot take out a life insurance policy until you reach ‘adulthood’ at the age of 18. If you did become a teenage parent it is a good idea to take out a life insurance policy as soon as you can to ensure that your children are covered financially, should the worst happen.

Life insurance for older parents

While term life insurance is still an option for parents over 50, there is an additional policy type you can consider:

An over 50s plan offers guaranteed acceptance to all UK residents aged 50-85. This cover lasts for the rest of your life, ensuring a payout. It's ideal for those with less favourable health, as no medical information is required. However, the downside is that the sum assured is significantly lower, such as £20,000 compared to £200,000. Depending on your coverage needs, this may not provide sufficient protection.