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If you have dependants who rely on you financially, putting the right kind of life insurance in place while you’re fit and healthy 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 for 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 cover?
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 - also known as business life insurance - 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, which often also includes critical illness cover. 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. In fact, last year a survey from our partner Scottish Widows found that more than half - 60% - of women with dependent children have no life insurance in place.
Sadly, this leaves their 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 we get joint life insurance for parents?
Joint life insurance can be a good idea for married parents, civil partners and live-in partners. Insuring both lives together is ideal if your mortgage is in joint names, 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, putting 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.