Why do dads need life insurance?

Becoming a dad is an incredible milestone in life but also one that brings plenty of new financial responsibilities.

From the moment your child is born to when they head off to university, there are many costs to factor in during this time.

In fact, according to the Child Poverty Action Group, the cost of raising a child to 18 in the UK is an eye-watering £152,747[1].

For this reason, many parents take out life insurance to secure the financial future of their family.

Having life insurance in place gives you peace of mind that if anything were to happen to you, your loved ones could manage without your income.

In this guide, we explore life cover for:

Premiums start from just £5 a month † , less than what you’d pay for a couple of pints down the pub.

Watch our short video to gain a greater understanding of what life insurance is and why you might need it as a devoted dad.

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What does life insurance cover?

Different policy types can be taken out to protect different aspects of your life, but primarily a life insurance policy is used to cover:

  • Mortgage repayments or rent payments
  • Family living costs
  • Household/utility bills
  • Outstanding debts
  • Childcare costs
  • School or university fees
  • Funeral expenses
  • An inheritance

Types of life insurance for dads

Level term

Level term life insurance is the most common type of life cover.

It’s designed to pay out if you pass away during a fixed period of time (the term).

The pay out amount and your monthly premium payments remain fixed (or level) throughout the life of the policy.

Level term life insurance can be used to cover a mortgage, family living costs, bills, childcare and funeral costs.

Decreasing term

Decreasing term life insurance is the most affordable type of life cover.

It’s also designed to pay out if you pass away during a fixed period of time (the term).

However, unlike level term life insurance, the pay out amount from this policy will decease throughout the term.

This makes it ideal for covering debts that will also reduce over time, such as a repayment mortgage.

Whole of life insurance

Whole of life insurance is a form of life assurance as it guarantees a pay out when (not if) you pass away, no matter when that may be.

This type of policy is usually more expensive than term-based policies, but dads in good health can secure more favourable premiums.

Whole of life insurance can provide a large pay out that’s typically used to cover family living costs, funeral costs and for leaving an inheritance.

Family income benefit

Family income benefit (FIB) is different to traditional life insurance, as it doesn’t pay out a cash lump sum in the event of your passing.

Instead, it provides your family with tax-free monthly payments over a set period of time.

It’s designed to replace a lost income and to help with long-term family budgeting.

Payments can be used to cover the mortgage or rent, daily living costs, bills and childcare.

Get help choosing the right policy for you by using our fee-free, award-winning life insurance broker service.

Source: https://www.childbereavementuk.org/death-bereavement-statistics

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How much does life insurance cost for dads?

Dads can secure life insurance through Reassured from as little as £5* a month.

But bear in mind, the actual cost of your life insurance will depend on your individual circumstances and the policy type you choose.

The main factors which affect the cost of premiums include:

  • Your age
  • Your health & lifestyle
  • Smoking status
  • The type of policy
  • The cover amount (or sum assured)

The table below shows the cost of life insurance premiums for term-based and whole of life cover according to age. Quotes based on a non-smoker in good health for £100,000 of cover:

AgeLevel term life insurance (20-year term)Decreasing term life insurance (20-year term)Whole of life insurance
20£3.61£4.36£61.03
25£4.73£4.92£64.86
30£4.82£4.99£71.01
35£6.00£5.09£82.93
40£7.87£6.05£100.90
45£11.07£8.10£124.34
50£16.18£10.99£150.50

How much life insurance do dads need?

Once you’ve decided which policy type best meets your needs, you’ll need to calculate how much life insurance cover you require.

If you're solely looking to cover a mortgage, then you’d simply secure a sum assured to mirror your remaining mortgage debt.

However, if looking to cover future family living costs too, then you would need to factor in your regular outgoings as well such as:

  • Loan repayments (car finance, personal loans)
  • Daily living expenses (food, clothing, leisure activities)
  • Household bills (gas, electricity, water, council tax, tv license, broadband)
  • School or university fees

You may also wish to factor in additional costs which may arise after your passing, such as:

  • Funeral costs
  • Legal fees
  • Loss of household income due to reduced working hours
  • Additional childcare costs

Life insurance can also be used to provide an inheritance for your loved ones, so think about whether you’d like to leave behind a lump sum gift to them.

Dad's life insurance calculator

Dads, use our handy calculator to find out how much life insurance you may need, based on which costs you would like it to cover.

Also consider any savings or existing life insurance you have, which may reduce the overall amount you need.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
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You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
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According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.
£
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
£ -

Your total cover estimate

£ 0

Let us find your best available quotes.

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How long do dads need cover?

As a dad, the length of your life insurance policy is usually determined by two key factors:

  1. The age of your children
  2. The length of your mortgage term

If taking out a decreasing term policy to protect your home, generally you would select a term to mirror that of your mortgage.

This would ensure that if you were to pass away before your mortgage was cleared, your family would be able to remain in their home without worrying about money.

Alternatively, you may choose to use the age of your children to decide the length of your policy.

When looking to secure the financial future of your kids, your policy could align with the length of time until they’re independent.

It’s also important to consider whether your children will go to university, therefore extending the age at which they’ll reach financial independence.

Should I get a single policy or joint policy?

If your partner doesn’t have their own life insurance already, then you may consider taking out a joint life insurance policy in both your names.

Joint life insurance key points:

  • Covers two lives simultaneously
  • Requires one monthly premium payment
  • Pays out if either policyholder passes away during the term of the policy
  • Cover expires after a valid claim
  • Costs around 25% less when compared with two single policies

Whilst joint life insurance could save you money, you may feel that your children are better protected if both parents have their own separate life insurance.

This is because once a joint life insurance policy pays out it expires, leaving the surviving parent without any cover and without financial protection for your children.

It can also be difficult to split a joint life insurance policy in the future if the nature of your relationship changes.

The following table shows a price comparison between the cost of a joint policy compared to two single policies. Quotes are based on a non-smoker in good health over a 20-year term for £100,000:

AgeJoint policyTwo single policies% Saving
20£6.25£7.22-13%
25£7.13£9.46-25%
30£8.79£9.64-9%
35£10.58£12.00-12%
40£14.30£15.74-9%
45£21.08£22.14-5%
50£31.53£32.36-3%

Life insurance for young dads

Dads who are young and in good health are in the best position to secure the cheapest life insurance rates.

This is because the younger and healthier you are, the longer you’re expected to live - and the less of a risk you pose to the insurer.

As you get older, your health may deteriorate and your life expectancy reduces, increasing the risk of a claim and hiking up your premiums as time goes on.

No one knows what’s around the corner in life, so it’s sensible to secure affordable cover whilst you can.

Dads in their 20s or 30s can lock in super-low premiums (from as little £5 a month), so why not seize the opportunity today?

Life insurance for older dads

It’s not too late to secure affordable life insurance as an older dad.

Dads who are in their 50s or 60’s may consider whole of life insurance or an over 50 plan.

Both options are forms of life assurance, meaning that a pay out is guaranteed when you pass away (not if you pass away, as with life insurance).

It’s possible that at this stage of life you’ve already paid off a large proportion of the mortgage and your children may no longer be financially dependent on you.

In this case, your life insurance can be used to help cover future living expenses for your family, your funeral costs and/or to leave an inheritance.

Life insurance for dads who work

Dads who are employed in the UK often benefit from some form of life cover through their employer.

This is commonly known as death in service benefit. It provides your loved ones with a pay out of approximately 3x your annual salary should anything happen to you.

Whilst this is a great perk, if you have a sizeable mortgage and/or young children it’s unlikely to provide the required long-term coverage to negate the need for personal life insurance.

Also, these employee benefits don't travel with employees. So, if you were to change jobs or retire then you would lose this benefit and your family won’t be protected.

What you can do in the meantime is ‘top up’ your death in service pay out with the required level of personal cover to ensure your family has adequate protection should you pass away unexpectedly.

Life insurance for self-employed dads

For the self-employed dads out there, life insurance is considered even more important.

This is because you can’t rely on a death in service pay out from an employer, and your family could be left financially vulnerable if anything were to happen to you.

Life insurance can be taken out to protect your income and ensure your family can continue their currently lifestyle if you were no longer around to support them.

We have written a dedicated life insurance for self-employed workers guide if you require further information »

Life insurance for dads-to-be

For all you proactive dads-to-be out there why not secure your life insurance before the baby arrives?

Let's face it after your little one arrives; you'll have much less spare time (and you’ll also be sleep deprived).

Remember the younger you are when you take out cover, the cheaper your premiums.

Secure the financial future of your growing family before the birth, and then focus on your little bundle of joy.

Reassured in the knowledge your family is financially provisioned for whatever the future may hold.

Compare Dad's Life Insurance » Find Your Best Quote

What about stay-at-home dads?

It’s a common misconception that stay-at-home dads (and mums) don’t require life insurance as they don’t earn a salary.

In reality, this couldn’t be further from the truth.

If you’re a stay-at-home dad, take a minute to consider all the unpaid jobs you undertake:

  1. Childcare
  2. Taxi service
  3. Chef
  4. Cleaner
  5. Gardener
  6. Food shopper
  7. Mechanic
  8. Homework tutor

Now, uncomfortable as it may feel, think about how these roles would be replaced if you were no longer around.

Take childcare for example. The average cost of full-time childcare is £263.81 a week, per child[3].

Could your partner afford these significant ongoing fees?

If not, would your partner need to give up work or reduce their hours? But then where would the money be coming in?

Life insurance can provide the answer, by paying out a lump sum if the worst were to happen.

From 20p-a-day, life insurance can provide cover, protecting your family whatever the future may hold.

What if I have pre-existing conditions?

If you’re a dad who suffers with health problems, then you may worry about how this could affect the cost of your life insurance or your ability to get cover at all.

The truth is that due to your pre-existing condition, your monthly premiums are likely to be higher.

However, the extent of this really depends on the severity and manageability of your condition.

It also depends on the insurer, as the level of risk you pose will vary between insurers.

Making it important for dads with health problems to compare multiple quotes for cover.

This can be done quickly and easily by using our award-winning broker service.

Reassured compare quotes from major insurers as well as smaller specialists, providing you with a range of suitable options.

What if I smoke?

Dads who smoke, whether that’s regular tobacco or e-cigarettes, will pay more for life insurance than non-smoking dads.

Due to the many health risks associated with smoking, insurers will hike premiums to mitigate the higher risk.

However, this doesn’t mean affordable life insurance options aren’t available.

What it does mean is that you should compare a wide range of quotes to find the best possible deal.

Also, the sooner you take out life insurance as a smoker, the better. This is because as you age, your premiums will increase at a much faster rate than those of a non-smokers.

The table below shows the difference between the average cost of level term life insurance for a smoker and a non-smoker in good health. Based on a 20-year term for £100,000 of cover:

AgeSmokerNon-smoker% Saving
20£4.02£3.61-10%
25£5.45£4.73-13%
30£6.76£4.82-29%
35£9.69£6.00-38%
40£15.52£7.87-49%
45£24.71£11.07-55%
50£39.57£16.18-59%

If becoming a dad has given you the motivation to quit (securing cheaper premiums) you can find support and guidance here https://smokefree.gov/ »

Do single dads need life insurance?

Yes, whether you’re a single dad or a single parent, life insurance is essential if you have children who are financially dependent on you.

The pay out from a life insurance policy could help to support your children whilst they’re still young or to provide an inheritance for them later in life.

If you have joint life insurance with an ex-partner, depending on the nature of the break-up, you may want to cancel this policy and take out a new single policy.

If you share children, it's usually a good idea to liaise with your ex-partner to ensure that between you, your children are adequately protected.

We recently wrote this comprehensive life insurance for single person article if you require additional information »

What about having more children?

There are a number of scenarios where dads can change their life insurance without requiring additional underwriting.

Some insurance providers offer a special event option which encompasses events such as having more children or taking out a bigger mortgage.

The cover amount can be increased to account for the larger amount of protection required.

This increase will, however, be reflected in the cost of your premiums.

If you want to have more children, remember to consider your policy and whether you have enough coverage in place to meet your changing circumstances.

Can I take out life insurance for my dad?

Yes, with some insurers it would be possible to take out life insurance on behalf of your dad, as long as you can prove you have ‘insurable interest’ in his life.

Insurable interest means that you would lose out financially if he passed away. For example, you own a business together, or he’s repaying a loan to you.

To take out life insurance for your dad, you’d need his permission and you must be eligible to take out cover yourself.

It’s not possible to purchase a life insurance policy on behalf of someone else through Reassured.

Other types of life insurance for men and dads

Income protection insurance

Income protection is exactly what it says - protection for your income.

It pays out up to 70% of your gross salary if you’re unable to work due to accident or illness.

You’d receive monthly tax-free payments to help cover anything your usual salary would cover, such as mortgage payments, rent, bills and daily living costs.

Premiums start from just 20p-a-day ‡ through Reassured Advice.

Critical illness cover

Critical illness cover will pay out if you’re diagnosed with a critical but non-terminal illness whilst cover is in place.

It can help to cover costs and minimise financial disruption to your family whilst you’re unable to work.

Critical illness cover can be added to your life insurance policy for an additional fee, or it can be purchased as a standalone product with some providers.

Compare quotes through Reassured to find the best deal.

Free life insurance quotes for dads

We understand being a parent is pretty hectic and finding the perfect life insurance policy may seem like a time-consuming task.

However, by using a fee-free broker such as Reassured to compare quotes, you could have affordable cover arranged in no time.

Dads without life insurance - why not seize the day and let us help you arrange financial protection for your family?

We look forward to saving you time and money!

Compare Life Insurance for Dads »

Sources:

[1] https://cpag.org.uk/sites/default/files/files/policypost/CostofaChild2020_web.pdf

[2] https://www.childbereavementuk.org/death-bereavement-statistics

[3] https://www.daynurseries.co.uk/advice/childcare-costs-how-much-do-you-pay-in-the-uk

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