Having children can be a time of great joy but also certain levels of anxiety or worry. Suddenly you have this little person who is dependent on you in every single way, including financially. Added to that, children are expensive and your finances are going to be stretched more than ever.
This makes getting life insurance a great idea as you’ll be able to cover these increased costs should anything happen to you. But what do you need to cover? What type of insurance should you get? Is it worth it? These are the types of questions that will be running around your brain and we can help provide a bit of clarity.
Why should I get life insurance?
There are many different financial commitments you’ll have with your children over the years. Your partner trying to cover these on a single income if you pass away, can seem impossible. Childcare is extremely expensive and there are also educational costs such as equipment and uniforms. Day-to-day expenses such as food, bills, clothing, toys and recurring costs such as birthdays and Christmas.
Most couples will find a way to cope with these increased incomes but on a sole income it could be a different story. This is why life insurance is a great idea to have as a safety net.
If you’re already a single parent then life insurance can be a wonderful way to make sure your little one won’t have to worry about financial support. These funds could be placed in a trust or used to help out the child’s guardian. With Bequest, their partners at James Pearson Estate Planning (JPEP) would love to help you set up a trust.
Types of life insurance
If you’re looking at getting life insurance, then you need to know the different types available. Once you do, you can work out which one is right for you.
Whole Life Cover – In the traditional sense of whole life cover, both the premium and payout are designed to stay the same throughout the policy. This can be ideal for those looking for a high cash lump sum after they pass away and who don’t mind paying higher premiums.
Term Insurance – This is the simplest form and can be either level (payout stays the same throughout the policy) or decreasing (payout drops incrementally over the policy). With this type of insurance, you aim to cover something specific, such as a repayment mortgage.
Bonus Critical Illness Cover – This is a specific type of life insurance policy that can be added to whichever type of insurance cover you opt for. It can help you with the cost if you’re diagnosed with a critical illness and can help with a loss of income or cover medical expenses.
How to choose the right cover
The first thing that you need to think about is what it is you’re trying to cover. If it’s for your mortgage then you’ll need a different type of cover than if you were looking to simply leave a large lump sum for living expenses. If you feel they’d need more of a safety net, a higher level of coverage is needed. Rather than thinking of life insurance as just one big monetary figure, it makes more sense to tie it in with your financial situation to get a policy suitable for you.
Getting a policy that grows with you
A misconception with life insurance is that you’ll be stuck paying a static monthly amount with no flexibility. While some policies may be like that, it doesn’t have to be that way.
A better idea is to get a more flexible policy that can grow with your situation. It could be that you will have a mortgage, or children in the future. Bequest policies can change as your life changes, it’s great. There is also the idea that for young people, life insurance is a waste of money. The truth is that for healthy young people, premiums can be minimal and you can get that cover straight away. It will also save you thousands of pounds by getting life insurance earlier.
Protecting your child
As an expectant father, your life is soon to be changed forever. While that may sound daunting, trust me that being a father is the best feeling in the world. It’s important to make the right decision based on your circumstances, but having that safety net of life insurance will allow you to breathe a little easier.
Bequest does everything they can to put your mind at ease, life insurance shouldn’t be complicated or expensive, it will help you stop worrying about whether your child will be okay financially should the worst happen.
Author: Terry Jones