Life insurance for parents

How much life insurance you need will depend on what it is you're looking to protect.

Generally speaking, you should consider all of the aspects you would like to financially provision for and the sum of these should be the overall amount of protection you secure.

For example; outstanding mortgage + family living costs + funeral costs + university fees = sum assured.

If you're unsure of the amount of life insurance you require, simply get in touch.

We can discuss your individual requirements and provide you with all the information you need to make an informed decision.

Term-based life insurance is the most common policy choice among new parents.

Cover lasts for a set period of time and if you pass away during this term, a pay out will be made to your loved ones.

There are two types of term life insurance; level and decreasing term.

Level term life insurance provides a fixed lump sum pay out making it ideal for helping to cover aspects which don’t change in value.

For example, an interest-only mortgage, an inheritance or daily living costs such as childcare.

Decreasing term, on the other hand, provides a lump sum pay out which reduces in value throughout the policy term.

As a result, it's best suited to helping cover costs which decline over time, for example, a repayment mortgage.

The below data compares the monthly cost of a £100,000 level term vs decreasing term policy over a 20-year period for a non-smoker in good health:

Joint life insurance protects two lives simultaneously and saves on average 25% compared to two single policies.

As a result, it's a popular choice among young parents.

If one parent passes away, the other will receive a pay out, which can be used to protect your family.

However, upon the first death, the policy expires, leaving the surviving partner unprotected and needing to arrange cover when older.

It's likely cover will still be required for protecting your children, therefore, if your budget allows, it may be best to opt for singular cover.

Two single policies could result in two separate pay outs, potentially offering double the coverage.

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 over a 20-year term for £100,000:

Several insurers in the market have recently begun offering free life insurance for parents.

Cover lasts for the first year of their child’s life and usually protects each parent for a sum assured of £10,000.

Whilst this may seem like a great deal, in reality, £10,000 is unlikely to be sufficient to support your family if the worst were to happen.

Factoring in costs such as mortgages, debts, childcare and living expenses, it’s easy to see how fast this £10,000 would go.

Therefore, to ensure your family receives the true amount of cover required, it may be best to arrange standard life cover with a sufficient sum assured.

Some life insurance policies can be adapted if your personal circumstances change.

Having more children or moving to a larger home are two instances where a special event option can be triggered.

This is when the sum assured can be increased without the need for additional underwriting. (Although, this increase will be reflected in the cost of your premiums).

If a special event option isn't available, you could cancel your existing cover and take out a new policy.

Alternatively, you could keep your existing policy and take out a second policy to bridge the cover gap.

In this instance, contact Reassured to identify a suitable solution.

As a single parent, it's likely that you're your child’s only financial support. For this reason, life insurance is usually essential.

As a single parent, if you were no longer around, your children would be left without your emotional or financial support.

Arranging single parent life insurance is no different from arranging a single policy.

Determine what it is you're looking to protect, how much cover you need and how long you need it for.

You'll continue to pay premiums for the duration of the policy and if you pass away during the term, your beneficiaries receive a pay out.

We're aware that living in a one-income household can mean that your budget is tighter, but at Reassured, we compare quotes to save you money.

Contact our team today and get single parent life insurance from as little as 20p-a-day.

Whilst term life insurance and family income benefit are still available to parents over 50, there are two other policy types you may consider.

An over 50s plan provides guaranteed acceptance to all UK residents aged 50-85.

Cover lasts for the rest of your life, guaranteeing a pay out.

This is ideal for anyone who has experienced less than favourable health, as no medical information is required.

The downfall with this type of cover, however, is that the sum assured you can secure is significantly lower. For example, £20,000 vs. £200,000.

Therefore, depending on what it is you're looking to protect, this may not provide a large enough level of cover.

Whole of life insurance, on the other hand, provides the potential for £200,000, lasts for the rest of your life guaranteeing a pay out but does require medical information.

As a result, this type of cover is ideal for those in later life who are in good health.

The table below shows an example price comparison between all available options for parents over 50 who are non-smokers in good health, as well as potential cover amounts for this price:

It's often questioned whether or not you can purchase life insurance on behalf of your parents? The answer is yes.

It's possible to purchase life insurance on behalf of your parents, although the policy will remain in their name and any decisions regarding the policy (such as cancellation) will remain theirs.

Also, your parents will need to complete any required health and lifestyle questionnaires themselves.

As with any policy, the insurer will assess the likelihood of a claim being made and calculate the premium accordingly.

When deciding to take out life insurance on behalf of your parents, it's important to consider the type of life insurance policy most suitable.

This will be determined by their age, health, smoking status and the sum assured they're looking to secure.

It's common for children to look into taking out cover for their parents when they're in later life.

In this scenario, whole of life insurance or an over 50s plan would generally be the most suitable options.

Critical illness cover provides a lump sum pay out if you're diagnosed with a serious, yet non-life-threatening illness.

This pay out could then be used to help replace lost income, make necessary home adaptations or simply to enjoy with family.

Critical illness cover does come at an extra cost but can be applied to any of our term life insurance policies.

Simply get in touch today for your free quote.

Writing your life insurance in trust can help your pay out avoid 40% inheritance tax and probate.

At Reassured we're able to offer a free trust service on the majority of the policies we sell, to help guide you through the application process.

We're also on hand to answer any questions you may have.

Get in touch with our customer services team today to make the most of your selfless investment.

[1] https://www.directlinegroup.co.uk/en/news/brand-news/2022/05102022.html

[2] https://www.sunlife.co.uk/funeral-costs/

https://cpag.org.uk/sites/default/files/files/policypost/Cost_of_a_child_2022.pdf

https://www.finder.com/uk/mortgages/mortgage-statistics

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