Life insurance for your family
Getting married and having children tend to be the biggest triggers in making life insurance decisions, so it’s not uncommon for people to only begin seriously considering life insurance once they have a family. While we don’t offer a product called ‘family life insurance’, we do have different types of life insurance that can be used to help financially protect families.
Please remember that life insurance is not a savings or investment product and has no cash value unless a valid claim is made.
We profile three family situations below:
#Family 1: Married or Co-habiting couple
You may be feeling that all your money is needed on things like securing your dream home, potentially stretching yourself further with essential – and non-essential – renovations. Adding life insurance at this point to your list of monthly expenses can seem like just an additional expense.
But could you or your partner afford to stay in your home and pay the monthly mortgage payments if you didn’t have any financial protection if one of you were to die? One option for this couple could be Decreasing Life Insurance, if they have a repayment mortgage. Or Life Insurance if they have an interest only mortgage or want to help financially protect their loved ones.
Joint life policies can be cheaper, but it is worth noting that they only pay out once, so the surviving partner would be left with no cover.
#Family 2: Married or Co-habiting couple with one child
Having a baby can be a mortality wake-up call. Suddenly, you are responsible for an actual human; someone who completely relies on you, well, for everything! If something happened to you or your partner, would the other parent cope with the financial consequences alone?
Life Insurance gives you much needed peace of mind knowing that if you were to die while you're covered by the policy, it could pay out a cash sum. It could be used to help protect the family's lifestyle and everyday living expenses or help to pay the mortgage (interest only).
If you can stretch your monthly budget a little further, it might be worth looking into Critical Illness Cover too. It’s an option that can be added for an extra cost when you take out Life Insurance or Decreasing Life Insurance and can help minimise the financial impact on you and your family if you were to become critically ill with a specified critical illness.
#Family 3: Single parent
If you are the sole breadwinner and financial provider for your young brood, that can be a big responsibility. It's horrible to have to think about it, but have you considered who would look after your dependents and what financial support would they need if you were to die? Life insurance can give you peace of mind knowing your children could be cared for financially if the worst were to happen to you, while you're covered by the policy. It could pay out a cash sum to your beneficiaries to help with things like child-care costs and everyday living expenses.