What part can life insurance potentially play in the care of your child and how should you handle it as a parent?
Well, ask yourself these questions. If you are a mum caring for your one-year-old child at home:
- who would look after them if you were to die?
- would there be any additional cost involved?
how would expenses be met?
If that has got you thinking, then read on…
Imagine a scenario where you and your husband both have well-paying jobs, you get pregnant, give birth and you decide to step away from your career for a few years to raise your child. It was then your intention that they would attend a day nursery before starting their education at a local private school as a day pupil.
However, six months after the birth of your child, you receive the devastating news that you have been diagnosed with terminal cancer and only have months left to live. Sadly, you pass away a few months later. I'm so sorry 😔. Your husband not only has to grieve but is faced with having to make some decisions surrounding the care of your child.
For instance, does he want to give up work for an extended period of time? He decides that he wants to continue working and will need to make another decision about the care arrangements for the little one. So, will a family member look after the child while he is at work? Or will he need to pay for care? 😕
By planning ahead, life insurance could help towards the cost of caring for your child. Let me explain.
Let’s say that you and your husband bought your four bedroom detached home with the assistance of a capital and interest repayment mortgage, that you are repaying at £1,000 per month over a 25 year period.
Here are a few main life insurance options that could work for this situation.
Term life insurance: available during the specific term of the policy
- Decreasing term: your premium staying the same, but the payout decreases over the policy’s term. It will pay out a sufficient sum to clear the mortgage should either of you die during the term of the policy.
- Level term: both the premium and payout staying the same throughout the policy’s term. It could be bought in addition if you don’t think basic insurance is enough to carry any other costs that may arise, like childcare or education.
Whole-of-life insurance: no matter when you die, your loved ones will receive a lump sum payout. However, the older you get, the less reliant your loved ones may be on you financially. Term insurance could be a better option if this is your thinking.
What if you are a single parent living in a rental property? It could then be argued that it is even more important you consider life insurance.
If you pass away while your child is financially dependent upon you, what will happen to him or her? Could they be looked after by his or her grandparents? If they are physically able and in good health, of course, but would they require any financial assistance to do so? Or if other care is necessary, a policy could help fund that.
So, be proactive, look at the life insurance options above, and consider the best option for you. It is so important to provide protection and support for your family as a mum or dad.
Arranging life insurance
So, having established that you have a need for life cover, where can you find all of your options and get covered quickly? Well, you will be pleased to read that at Bequest we have just that. Our platform is made for you and your family. It is quick, simple, and has a single dashboard to manage your life and end-of-life admin.