Life Insurance for Parents

Life insurance for parents is precisely what anyone with a child should consider for peace of mind. Did you know only 27% of first-time parents have life insurance?

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Life insurance for Parents.

Life insurance for parents is precisely what anyone with a child should consider for peace of mind.

Did you know only 27% of first-time parents have life insurance? You may be eager to find financial support for your loved ones long after you’re gone. After all, life insurance is not for us, it’s for those we leave behind to carry on without us. We want to eliminate any worries, bust the myths and make life insurance easier to understand so new parents can get what they need.

We understand how difficult it can be to think about the future, but when you have children, it’s essential to plan ahead and prepare for the future.

We also understand that you might have questions about life insurance or feel unsure about getting it yourself. That’s why we offer personalised assistance from a team of experts who will guide you through every step of the process – from finding out how much coverage you need to providing you with information so you can make a decision on the type of policy that best fits your needs.

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We've helped hundreds of families find life insurance for parents. Now we're here to help you.

Parents know the importance of life insurance. But it’s easy to get overwhelmed by the process – especially when you’re trying to keep track of your little ones at the same time.

When you’re looking for life insurance for parents, you want to make sure that it’s the right fit. You don’t want to worry about whether or not you’ve selected the right policy. And you certainly want to ensure that your needs, budget and lifestyle have been perfectly considered.

That’s what we’re here for.

So, what can you expect from our process?

1: Fill out the quick and easy online form. When you’re ready to find out more from our experts, it’s time to get a quote. Simply enter a few quick details and we’ll call you back for a free quote!

We know that you want a quick, fuss-free quote, and that’s why we make it our mission to provide this wherever possible.

2: Want to get more information? No problem, we’re always happy to help. Our commitment is to provide customers with superior service. We are proud to provide straightforward, precise details about our products and services, such as types of cover, and invite you to ask any questions if anything isn’t clear..
3: It’s time to take a look at your options. At nowsure, it’s important for us that you feel comfortable and safe sharing your budget and any medical conditions so an accurate quote can be provided. After we’ve assessed your affordability and eligibility, we’ll inform you of the different policies available to you from a panel of insurers.

Secure your family’s future and put your mind at ease, speak to a dedicated agent at nowsure today.

What is life insurance and why is it important for parents?

For parents, life insurance for parents is an essential part of the family’s financial protection.

When you have dependents, it’s important to know that they’ll be well taken care of if anything were to happen to you – and that means protecting their futures in the event of unexpected illness or death.

This type of coverage provides a financial safety net, helping to give you peace of mind knowing your family will be looked after financially if something happens to you.

Fundamentally, life insurance is an agreement between a person and an insurance company. In exchange for monthly premium payments, the insurer usually pays a lump sum to the policyholder’s named beneficiaries after they pass away.

As a parent, you know better than anyone how difficult it can be to save money. The costs of childcare and other expenses can add up quickly, and there’s no guarantee that your children will have protected funds available to them should you pass away.

Therefore, purchasing life insurance is one of the most affordable ways to prepare financially for the future: it ensures your family will be taken care of after your death, at an affordable cost.

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So, why is having a life insurance policy beneficial to parents?

Replacing income streams: Many families rely on two household incomes to cover their monthly expenses. The loss of one of those incomes can be devastating, especially if there are children involved. A life insurance policy can help you replace the income your family would no longer receive if you were no longer around.
Providing for dependents: If you have children who depend on you for financial support, it’s important to plan for their future well-being, purchasing a life insurance policy can help with this. You can choose how much coverage you want and how to use the funds when you pass away.
Paying for debts: When you pass away, there will likely be some outstanding debts (such as a mortgage, loans or credit cards) that need to be paid off by someone in your family or by the estate of the deceased person. A life insurance policy may be able to help pay off these debts so that they don’t fall onto loved ones shoulders alone.
Covering funeral costs: The thought of unexpected death is harrowing. We know that, and so do the life insurance providers. A life insurance payout can be used to cover the cost of funeral expenses should the worst happen to you. With young children and a family grieving, having this cover in place eases the burden on your loved ones and gives them a chance to grieve without worrying about how they’ll pay for your funeral.

You should not have to worry about the financial complications that could arise under unprecedented circumstances. By getting life insurance from nowsure, you can be certain that your family will be taken care of if you pass away.

Types of life insurance policies that are appropriate for parents

Life insurance can be a confusing topic, but it’s not as complicated as you might think.

There are a few common types of life insurance on the market today. It’s a common misconception that life insurance comes at a high cost, the truth is: all products can be customised to suit the coverage you need, the term length required and your budget.

So, how do you know which one is right for you? Let’s take a look at some of the most popular options available:

Term life policies

Usually, this type of life insurance is the most affordable option. The reason for this is because it only covers you for a specified periodof time (usually 10-30 year term) – hence the policy name. So long as you pay the set premiums, your beneficiaries will receive a payout if you pass away before the policy term ends.

Pros:

Your premium rate is generally agreed for the entirety of the policy term, meaning there are no unexpected rises in prices and your family can budget accurately for years to come.
Term life is typically a good solution for those that are unable to afford the higher premiums that come with whole life insurance. It is possible to secure lower premium rates at the time of purchase, which makes budgeting more manageable when you have a family to provide for.

Cons:

Unlike whole of life insurance, this type of cover cannot pay out beyond the term length you agreed upon signing your contract. Therefore, if you were to pass outside of the enddate, your insurance policy would not pay out.

Level-term life insurance

With level-term insurance, both your premiums and your pay-out sum will remain the same throughout the set term period, unless your premium payments are missed.

Suitable for: Some people may choose this type of cover for interest-only mortgages and other long-term debts.

Increasing term insurance

Increasing term insurance tends to rise throughout the term, as can the premium rates you pay. This means that the death benefit will increase at a percentage selected when taking out the policy.

Suitable for: Inflation and rising living costs are a concern for many Britons, this type of insurance can ensure money is available when you need it most.

Decreasing term insurance

Decreasing term policies have a significant difference to level term, as the amount of insurance reduces alongside the reduction of other debts. In a nutshell, the purpose of this policy is usually to ensure all debts are paid upon death.

Suitable for: It is common for those with repayment mortgages and high-interest debts to take out these policies. However, it’s vital that the amount of debt and interest is calculated accurately (and insurers are notified of any changes) for this insurance to be effective.

Whole of life policies

Whole of life insurance is a type of life insurance policy that provides coverage for you throughout your entire life, until you pass away. Unlike term life, which only provides coverage for a set period of time, permanent insurance is designed to be an ongoing financial resource until you pass away.

Pros:

Compared to term insurance, permanent life insurance is more expensive but it alleviates the worries related to having dependents. By having permanent insurance coverage, parents can feel more secure about their children’s future in the event of tragedy.
You don’t have to worry about fluctuations in premium costs with this policy.

Cons:

Whole of life insurance tends to cost significantly more than term life, you are effectively paying a higher fee for the guaranteed pay-out that your insurance company will be inclined to pay once you die.

Whole of life insurance offers three types of policies:

Non-profit	Non-profit involves paying a set monthly premium until death. The payout amount is decided upon on the date you take out the policy.
With-profit:	With-profit policies are much more flexible and come with different terms. Your fixed monthly premiums are invested in stocks and shares by your insurer. This means that your payout becomes dictated by market performance.
Unit-linked	Unit-linked policies require monthly premiums that are based upon the payout you choose. Your premiums are invested into the stock market by your insurer, and you may pay more if the policy’s investments do not perform as expected.

Who needs family life insurance and when is the best time to purchase it?

Buying life insurance does not need to be complicated, and it can be difficult to know when it’s the right time to buy. It is worth noting that the younger you are, the cheaper your premiums will be.

For some families, this is as simple as having a baby. For others, it’s more about renting or purchasing a new home or getting married. Whatever your situation, there are many reasons why you might decide to purchase life insurance as a parent.

Maybe you are stepping up and taking on the financial burden of caring for your children, or maybe you have recently married and want to ensure that your new spouse can continue making payments on the mortgage and other expenses should anything happen to you.

These are some of the key factors that may lead parents to buy life insurance:

After divorce or separation: Single parents may feel the financial pressure of being the sole breadwinner at home. When relationships break down, having life insurance in place can help put your mind at rest.
When you are planning for children: It’s no secret that life insurance comes at a lower cost the younger you are. Why? Because the higher the age, the higher the risk (generally speaking). Insuring yourself when you first start to think about having kids could ensure your monthly premiums remain low – this is also beneficial when you are financially planning for little ones.
When you are a stay-at-home parent: If a stay-at-home parent passes away, the working parent is often left in sole responsibility of caring for and financially supporting their children. It is completely valid for non-working parents to want life insurance should the worst thing happen to them.

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Choosing the right amount of life insurance coverage for your family

At nowsure, we know that one of the biggest concerns you encounter when choosing life insurance is figuring out how much coverage your family needs. It can seem like a daunting task to determine the right amount. But there are things you can consider that will help make this process easier.

First, think about how many children you have.
If you have more than one child, chances are that childcare costs are significantly higher. Or it may be that you want to provide a substantial amount of money to help fund their futures.

Next, think about your mortgage:
Do you have any outstanding loans? How long will it take for your spouse or partner to pay off these loans? This will help determine how much life insurance coverage you need.

Think about how your payout could replace your income.
Be sure to choose an amount that will provide for your family’s needs after your death. This might mean calculating a sum that is close to your salary. If you leave behind a small child or two, for example, you might want to consider a higher coverage amount.

Simply put, the more duties you have, the more insurance coverage you may need. After making a comprehensive list of financial obligations, calculate an approximate cost of each per month and determine the duration. In the case of your death, factor in expenses that are both currently existing and future ones that would affect your family.

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Single Vs joint life insurance: Which is best for parents?

Single parents have little to debate when it comes to choosing from single or joint policies. However, a couple may find it difficult to make the right choice for them. With so many factors to consider, we’ve broken down the two options to help you gain an understanding of both joint and separate policies.

Single life insurance

If you are a single person, the obvious choice is to go for individual life insurance. Single life insurance means that upon the death of the individual, there will be a pay-out for their loved ones. However, single life insurance isn’t just for individuals. A couple may choose to apply for life insurance at the same time but have separate policies.

Here’s what you should know:

Choice of type, amount & length of coverage, as well as different beneficiaries
Beneficiaries receive payment upon the death of the individual, not having to wait until both have passed away

Insurance continues for the other person even if one of the couple dies
In the event of marriage or relationship breakdown, the individual’s life insurance is protected
Some policies allow for you to receive an early cash payment if you are diagnosed with a terminal condition

Two single life insurance policies are likely to be more expensive

Joint life insurance

Joint life insurance could be a suitable choice for parents living together with their children, as they often have the same beneficiaries and financial responsibilities. Below are just a few of the facts you should know about before making a decision:

Combining your life insurance generally costs less than taking out two individual policies
The death benefit payment is made no matter which of the insured dies first

The length and sum of the policy must be the same for each person named on the policy

If one partner within the joint policy has any health concerns, this will usually increase the overall cost of the policy
In the event of a relationship breakdown, it can be difficult to transfer the joint policy to two single policies and the same terms may not be available.

There are two types of Joint Life Insurance: joint first-to-die; and joint last-to-die.

Joint first-to-die

This may be a good option for parents who would be left with substantial financial responsibilities, such as an outstanding mortgage, which they wouldn’t be able to support on their own
When one of the party dies, the other policy holder can usually continue life insurance cover under the same terms (within a limited time period) without the need for a new application

Upon the death of the first partner, the policy ceases, meaning the surviving partner no longer has insurance cover
The surviving insured may find it difficult to obtain a new policy once they’re older

Joint last-to-die

Beneficiaries do not receive the death benefit until the second insured has also died
Surviving insured does not have to rearrange a new policy or request extension of the current policy

Could be a good option for parents wishing to leave a lump sum to their children after they have both passed away

Choosing the right life insurance policy for you

Choosing the right life insurance policy can seem like a daunting task. There are many different types of life insurance policies and each one has unique advantages and disadvantages.

The main goal of life insurance is to provide your family with financial support in the event that something happens to you. It's important to understand what kind of coverage you need in order to properly assess which type of policy would be best for your situation.

1. Assess your needs

You need to assess your, and your family's needs to determine what type of coverage will suit you best. There are several ways to figure out how much life insurance your family needs, but one thing is certain - the more prepared you are financially, the less likely it is that your family will be left without any sort of financial support after your death.

2. Calculate your affordability

Before you decide on a life insurance policy, it's important to calculate your budget. After all, if your outgoings are already high, a term policy may be more cost-effective than a permanent policy. However, a whole life policy may be more convenient due to the consistent premium amount, as this may enable you to budget more efficiently.

3. Think about any pre-existing conditions

First, things first, don’t let any pre-existing conditions put you off applying for life insurance. There are hundreds of options out there, and it’s our job to help you find a policy that works. It’s vital that you are 100% honest and open about any medical conditions, as providers may make your claim invalid if you withhold any information.

FAQs

Can a minor be your life insurance beneficiary?

Most parents choose life insurance with the intention of providing for their children after their death. Any children under the age of 18 can be appointed as beneficiaries for life insurance policies, but minors cannot receive the payment until they reach 18 – their guardian will usually be given the money to support and manage the child(ren) until that date.

Can I switch from a joint life policy to separate policies?

In the event of a relationship breakdown, there are numerous routes you can go down to ensure you remain covered by a life insurance policy. You can contact your insurer and ask to either remove one policyholder from the policy or cancel the policy altogether . It’s important to go through the terms and conditions of your policy with your former partner to explore your options. Some policies may even include a ‘separation clause’, making it easier to split the policy.

How much life insurance should you have as a single parent?

There is no one-size-fits-all solution to life insurance, which is why you should be mindful of everything you currently pay for (and what your home and assets may be worth) to determine the right coverage. Take care to calculate everything from your everyday bills, salary and mortgage costs to your potential funeral costs, childcare outgoings and future education costs you might want to fund.

Commonly Asked Questions

How does life insurance work?

Put simply, life insurance works by paying a premium each month to your provider, which you’ll have to keep up for the duration of your policy. On your death, the people named in your policy (called your beneficiaries) will receive a tax-free lump sum or regular payments. How much this is depends on the level of cover you have chosen. And, of course, it’s also on the proviso that you die within the specified term of your policy.

It’s always advisable to compare life insurance quotes before taking out a policy. You and your family’s individual circumstances will determine how much cover you need and what you’ll have to pay in premiums. Other factors that may impact your life cover quote include your age and medical history.

How long do you need to have life insurance before you die?

Generally speaking, your life cover should start as soon as your application has been approved. This means that your loved ones will receive a pay-out whether you die in the first, fifth, 15th or 25th year of your insurance, as long as the policy has not run its term.

In some instances, however, the terms and conditions of the policy state that a waiting period is in place, so always read the details carefully before signing. This can happen in the case of a death by suicide, for example, where an exclusion period of 12-24 months from the start of the policy may apply.

How much does life insurance cost?

Compare multiple life insurance quotes to get a good idea of how much cover will cost you. It can start from as little as £5/month – possibly less than what you’re paying for your monthly Netflix subscription – but will vary depending on how much you want the policy to pay out, how long you want it to last, and other factors such as your age, medical history and lifestyle, including whether you smoke.

Don’t be tempted to lie about your circumstances to get a cheaper policy – any inaccuracies may invalidate a future claim. And remember that the best (by which we mean the cheapest) time to take out a policy is when you’re young and healthy, so don’t put it off either.

Should I buy the cheapest life insurance?

Life insurance is often an affordable way to make sure your family stays afloat financially when you pass away. But its benefit is only truly maximised if it covers everything you want it to. Comparing life insurance on price level alone could mean your loved ones lose out for the sake of a just few pence more in your pocket each month.

A smarter way to compare life cover is to be clear in your mind exactly what type of policy you’re after, how long you need it for and how much you want it to pay out. Once you’ve found several that meet your criteria, however, choosing the cheapest life insurance from the selection can make perfect sense. Always make sure you can afford the monthly premiums before you commit.

What are the main types of life insurance cover?

The most common policies are known as term life insurance. These cover you for a fixed amount of time and usually fall into two categories – decreasing term life insurance and level term life insurance.

Let’s start with decreasing term, which lets you choose how long you want the policy to run for. You’ll pay a monthly premium until that date, after which the policy ends and you’ll no longer be covered. The amount paid out decreases over time (hence the name), but you usually use this type of insurance to cover a mortgage, which also goes down with time too.

A level term policy, meanwhile, promises a lump sum for loved ones that always stays the same, whether you die in the first year of the policy, or the penultimate one. As a result it’s usually a bit more expensive than decreasing term insurance.

While the policies described above will cover you for a fixed amount of time, whole of life insurance has no ‘expiry date’. Your partner or children will receive a pay out whenever you die, and consequently this cover is a costlier option. It is often used to ensure a funeral can be paid for, or as part of inheritance tax planning.

What does life insurance cover?

Life insurance can cover your remaining mortgage, the rent, monthly bills, or loans and credit cards so there’s no immediate financial pressure on your loved ones if you die.

But it can also cover things like school and higher education, or childcare if your death necessitates this additional cost.

Sometimes the lump sum can be used as a gift, or simply to cover the cost of your funeral so it doesn’t come out of the family savings.

What happens if I outlive my life insurance policy?

Term life insurance only offers cover for a limited period of time. After your policy expires, you can’t claim any pay-out and the premiums you’ve put in won’t be returned.

An exception is return-of-premium life insurance, which will essentially refund what you’ve paid – but at the cost of much higher premiums while the policy lasts. What’s more, you usually have to hold the policy for the entire term and make all payments to get your money back.

Most people simply accept that life cover, like other types of insurance, is about weighing up the risks of not having it against the price you pay if you don’t need to claim. The peace of mind of knowing your family will be looked after if the worst happens often makes the decision easier.

When you near the end of a life insurance policy, it’s worth considering whether you still need cover. If your mortgage is paid off and your children have flown the nest, then you may not require it anymore. If you do want to continue, you could buy another policy or apply to extend your current one. But bear in mind your premiums are likely to be higher than they were for your original policy now that you’re older, and you may not meet all eligibility criteria.

When should I get life insurance?

Generally speaking, you’ll pay less for life cover the younger and healthier you are so, if you think you need it, it’s sensible to compare life insurance quotes as early as possible.

There are several events in life that inevitably make the question of whether to get life insurance more urgent. Buying a new home and taking out a mortgage is an obvious one. If you die before the loan is repaid, the responsibility for it will fall on your loved ones instead, so you need to think about whether they’ll be able to shoulder this without your income.

For other people, having a baby is their trigger to consider life cover. According to Child Poverty Action Group raising a child to the age of 18 in the UK in 2021 stood at £160,692 for a couple and £193,801 for a lone parent. Having a life policy in place, at least until children reach financial independence or have finished school, can give you peace of mind they’ll be provided for when you’re gone.

Even if you don’t have children, getting married or making any other long-term commitment to a partner can also be a reason to research life insurance. Whether you opt for a single or joint life insurance policy, your partner will be financially cared for on your death.

Life insurance is also relevant if you’re planning for a funeral and/or inheritance. According to the SunLife Cost of Dying Report 2022, the cost of a basic funeral in the UK was £4,056 in 2021. The lump sum your loved ones receive can be used to cover this, rather than it coming out of their own pockets. Alternatively the pay-out can make a difference for anyone looking to leave money to their children without inheritance costs. You can take out a whole-of-life insurance policy, which lasts until your death, to cover the inheritance tax bill you expect your heirs to have to pay.

Why do I need life insurance?

Life insurance provide peace of mind that your partner or children with be financially looked after when you’re not around to do it yourself. If your dependants are still in school (or younger), or if your partner relies on your income it’s especially worth looking into. Ditto if your family is living in rented accommodation or in a house with a mortgage that you pay. If there’s any doubt they could keep up repayments without your salary, life insurance could be a solution.

Even if the long-term financial future of your family looks relatively stable without you, life insurance can be helpful to cover funeral expenses, provide an inheritance, or cover extra childcare costs if you’re not around.

Not everyone needs life cover. Some already have a policy through their employer, others may feel their partner earns enough for the family to live on. If you’re older and your children have flown the nest, it might also be unnecessary. The key question to ask yourself is whether your death would have a financial impact on the people you care about.

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