What Is Child Life Insurance?

A child life insurance policy may not be something you've thought about before. Have a read to see if it's for you and your family.

The mere thought of losing a child is enough to make any parent feel sick. Child life insurance is a form of insurance that will pay out should your child become seriously ill and/or die during the policy term. It can give you financial help during the most stressful times.

Let’s answer a few of the most common questions you might have about child life insurance. 🤔

Can a parent take a life insurance policy on a child?

In short, no. Children cannot be insured because you do not have what is called an 'insurable interest.' This means you are not going to be losing income or assets if a child's life ends. Life insurance for children, or "baby life insurance," is really a part of your own policy.

We don't want to be cold.

The death of a child is a tremendous loss, and one many parents grieve over for years (or even forever). So, while we're talking about money and loss, we are trying to focus on the financial and legal language. We understand and empathise with any parents or families struggling with the loss of a beloved child. 💛

Do I need to buy life insurance cover for my child?

If your child dies or becomes very ill, then you'd need to spend a significant time away from work. If you add child life insurance to your regular bills, then the lump sum death benefit could help keep your home functioning with things such as mortgage repayments and bills while you're not able to earn money, or even help with the unfortunate case of funeral costs.

Can I add kids to my life insurance policy?

It’s rare to get a life insurance policy solely for a child. However, there are options for adding children to existing life insurance policies.

Critical Illness Cover Could Give You Time Off

Some critical illness cover policies will have an option to insure against the loss of a child. These plans provide financial support to help with funeral expenses, cover costs of hospitalisation, childcare costs, and any additional cost that comes from helping a child with a serious illness or terminal diagnosis.

With some companies, you can add critical illness cover to your own life insurance policy to provide maximum coverage for your family. You should note the cash payout only occurs for specific medical conditions.

If the worst happens, then the cash sum paid out will be 50% of your sum insured, up to £25,000. This can help you secure your family's future during a period of extreme stress, grief, and loss.

Rider insurance

It’s more common that you would add a child on to your own life insurance policy. The life insurance cost for a child rider is very small and there are usually no medical questions asked. Many families opt for one rider to cover all their children. One benefit of a rider is you can convert the rider to full life insurance cover for your children when they become adults. 👏

Term life insurance

Another way of insuring for the loss of a child. This is where you’ll pay into the policy for a set period of time until they reach adulthood. This often means a cheaper premium as the policy will expire once the term ends.

Life Assurance

A policy for your child throughout their life. While this can often give you a higher payout, the premiums are usually a lot more expensive, which makes it more rare than the other options. The benefit of these policies is they convert to full life insurance for your child without any further medical exams. These whole life policies might help some families with a history or expectation of lifelong illness.

How do I choose the best life insurance for myself and my family?

You should never dive headfirst into a life insurance policy without considering what is right for your specific needs. If you don’t have a life insurance plan yourself, how about you start there? 💛 Take a look at this article about reasons to get cover, it may help you realise how important life insurance is!

Are you a solo parent or do you have a partner? Who specifically should be covered? Are you planning to have a joint life insurance policy and attach a child to it or perhaps going for a sole policy? What type of policy are you looking for? How much of a policy payout do you need? How long do you want to pay the premium for? Are you all children included (or perhaps just the one that has a medical condition, for example)?

It’s important to look at your situation and choose the life insurance cover amount that works for you and your loved ones.

What are some of the factors and/or limits of a policy?

All policies will be slightly different and have their terms and conditions on various aspects. One such limit may be how much you can claim on a policy. This can often be capped at a certain level and will be linked in with the monthly cost of your premium payments.

Policies will also have age limits. For example, one life policy may be only available for children 18 and under. The most important conditions, however, may be what makes up a critical illness. If your child has a condition, then you need to be covered for that specific illness should something happen.

What’s the cost of cover? 💷

The cost of your cover is going to depend on a few factors. Medical history, your age and your child’s age, how much cover you want, the type of cover and how long the cover is for. Also, honesty is the best policy with life insurance as any withheld information (such as a preexisting condition) could invalidate the policy.

What is family life insurance?

Insurance policies may sometimes sound the same, but are quite different. Family life insurance is a standard form of insurance that pays out if a parent passes away. It doesn’t pay out if a child passes away unless you specifically ask for a child life insurance element.

Can I put life insurance in trust?

If you’re looking to leave money behind for your children, then you can put it in a trust. This is managed by someone until the trust pays out to the beneficiaries, your children. This can happen upon your death, or in some cases when they reach a certain age, such as 18. It’s also best to make sure your life insurance and trust are both placed in your will. If you have any questions about how this is done with a will, feel free to email our partners James Pearson Estate Planning (JPEP) at hello@jpestateplanning.co.uk. ✍️

Protecting the future

Whether you are looking to cover the loss of a child, protect against critical illness or give them financial security after you’re gone, there’s a policy out there for everyone. We currently offer term life cover and are excited to see where our products take us in the future. 🤩

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FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

0203 916 5433

FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

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