Planning for the future as a parent – life insurance

As a parent, it is important to plan for the future, particularly if you have a child with additional needs, in my opinion. It is such a worry what will happen to them when you are no longer around. I have recently been looking into life insurance and thought I would share this with you.

Upon reading some advice from The Money Advice Service I have a better idea of what I am looking for, so I wanted to share that with you. Maybe you are more organised than I am and have this all set up already? I am sure though, there are some of you who, like me, really have not got a clue! Would it be a good New Year’s Resolution to finally get it sorted?

Which life insurance?

There are several different types of life insurance, so before you even start searching, it is wise to know what you need.

Whole of life insurance

This policy covers you for the rest of your life, so whenever you die, you will be covered. Providing, of course, you have kept up with your payments. As you are paying it for the rest of your life, there is the possibility you will pay more with this type of policy than with others.

Family income benefit insurance

If you are the main earner in the house then this may be the policy you need. Rather than one lump sum, this policy pays out a monthly income based on your salary before death.

Decreasing term insurance

This type of policy lasts a set number of years, usually to match the length of your mortgage. The amount paid decreases year on year to match the decreasing payments, for example, with an interest-only mortgage. It is essentially designed to continue paying your mortgage off after your death. The difficulty with this type of life insurance is that it only covers the mortgage, not offering a lump sum that could be used if they need to move house, etc.

Level term insurance

This is similar to decreasing term insurance, but with the same amount paid each month to cover a debt or for a lump sum. This type of insurance only pays if you die during that term, however. Whilst it is usually affordable and simple for many people, if you do not die during the policy, your dependents will not get a payout. Remember that a medical diagnosis and or injuries from things like your c-section, etc won’t result in payout, it is just if you die. Additionally, if you are considering any cosmetic treatments you should check if these would be covered if something goes wrong.

My thoughts on life insurance

After reading more information about life insurance, I think the type most suited to me is whole-of-life insurance. That way, whenever I die, I can leave money for Ben or his care. This is what is important to me, especially because with his autism he may struggle to earn well in a job, and his care needs may be higher. Who knows, though, he may be the next big entrepreneur and be richer than me in a few years! I will be looking at brokers to find a suitable policy and get it set up. Whilst I am hoping not to die soon, I guess we just never know what the future holds.

Do you have life insurance? If not, then why not? I have always put it off as I thought it was too expensive, but it isn’t as bad as I thought! Talking of planning for the future, I need to update my will too! If, like me, you worry about how your weight will affect your life insurance, check out this post.