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Life insurance for parents, is it important?

Life insurance for parents, is it important?

As a parent, you want what is best for your children. You spend a huge portion of your life supporting and caring for your children and want to give them the greatest start in life that you possibly can. There are many ways you can do this. One of the best is by taking out a life insurance policy to make sure your children are covered, even if you’re not around. It is never a comfortable experience to think about leaving your children behind. However, it is important to consider having something in place to safeguard your family if the worst happens to you. 

There are a number of life insurance policies that are appropriate for parents. Whole-of-life cover, family income benefit or critical illness cover to name a few. However, it is a very individual decision as to which life insurance policy you choose. It depends on the needs of your family. 

Whole-of-life insurance

Whole-of-life insurance does exactly what its name implies: it covers you from the start date of the policy until you die. It guarantees that your dependents will receive a payout regardless of when you pass away. This type of policy could provide the most peace of mind that your family will be covered by a payout as long as you stay within your policy terms and conditions. There is also term life insurance that is similar. However, this will protect you for a specified period of time rather than for your whole life. If you die before the policy’s expiration date, your beneficiaries will receive a lump sum. However, if you die outside of your policy dates then your family will receive nothing. 

Family income benefit

Family income benefit is a type of life insurance policy that could lead to your beneficiaries receiving regular income for a specified period of time rather than a lump sum of money. Typically, you tell the insurer how much money your family will need if you die. They then base the premium cost on that. If the worst were to happen to you, family income benefit could help your family pay bills or keep up with mortgage payments. It differs from traditional term life insurance policies in that the amount paid out decreases over time. For example, if your coverage lasts 20 years and you die in the 15th year, your beneficiaries will receive 5 years’ worth of payments rather than a lump sum payment.

Critical illness cover

Critical illness cover is a type of life insurance policy that pays out if you are diagnosed with a serious illness that is specified in the policy terms. The tax-free payment can be used for anything you need during your illness. Such as covering potential income loss for you and your children or adapting your home, for example, for wheelchair access. 

The type of life insurance you choose as a parent is entirely up to you and depends on what your family will need when you are no longer around to directly provide for them. To compare your options head to our website and begin your journey to protecting your family today.

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