Have your clients helped secure their children's financial future?
Whether it’s days out, paying for school uniforms, helping them onto the property ladder or just helping making sure they’re financially secure, parents know all too well how costly it can be to raise children. But how many have considered the ongoing costs when their kids have ‘flown the nest’?
New research by Legal & General has found that there is an overwhelming sense of responsibility felt by parents with children aged 18-40, with over three-quarters (76%) saying they feel responsible for ensuring their adult child is financially secure. The ‘Forever a Parent’ research found that even after children moved into adulthood, parents continued to provide all sorts of financial support to help their loved ones. For many, this meant chipping in to help with general living costs (43%), paying bills (23%) or buying groceries (23%). Nearly a quarter (24%) had gifted more than a £1000 in the past year.
It’s a two-way street as well. The research also found that nearly half (46%) had been approached by their adult children for advice on financial matters. But what happens when that parent is no longer there to be relied upon for support, financial or otherwise?
Less than half (46%) of parents who said they felt responsible for the overall wellbeing of their child had a life insurance policy in place. And whilst some have considered what their death could mean for their family’s finances, how many have thought about the impact of a critical illness? Have they thought about how they can help to provide for their child’s financial future?
Advisers will be familiar with the protection gap. When Legal & General surveyed UK employees in its Deadline to Breadline campaign last year, the results showed that less than a third (31%) had a life insurance policy and worryingly just 13% had taken out critical illness insurance.
At Legal & General, we’re committed to providing you with tools to help tackle this protection gap. That includes introducing technology, such as our OLPC system, to help make selling protection and managing cases easier but also our protection campaigns including Deadline to Breadline, which aim to help advisers educate their clients on risks of not taking out an insurance policy and the lack of financial resilience in families across the UK.
That is precisely what the ‘Forever a Parent’ campaign is about – highlighting the need for parents to consider the financial future of their children or grandchildren. This is the perfect opportunity to explore how clients have supported their children over the past 12 months and hammer home the reality of how life events such as death, critical illness of a parent, or even the loss of a job can have on a family.