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What are the Insurance considerations now you are a parent?

Whether your kids are growing up or you have a newborn and are starting a family for the first time, your family needs protection from the unexpected.

Family finances are often stretched, and this means that if either parent unexpectedly, dies, falls ill, or cannot work for some time it can put a lot of strain on family finances very quickly. Naturally, we want to do the best for our children so the likelihood of having sufficient savings ‘just in case’ is low.

When advising parents or soon-to-be parents about their protection needs these are the following areas, we often discuss that are of particular interest to parents:

Income Split Between the Parents

If there is an imbalance in terms of salary between the parents it’s likely that the level of cover for each may differ.

Homemaker Replacement

Just because there is a sole breadwinner in the family doesn’t mean the homemaker shouldn’t also be covered. The home may likely need extra support in terms of childcare etc.

School Fees

For parents paying school fees the future cost of these may want to be factored. Imagine the worst happening, and on top of losing a parent with school fees unable to be paid, that child then must move school which can be a very stressful thing in itself.

Legacy

We want to do the best for our children. If everything goes to plan and we have long productive working lives there’s no reason we can’t help them with university costs, helping them towards their first housing deposit or with their first car to help with their independence. If our earning potential is cut short, we risk losing these important opportunities to help, and the feelings and memories that come with them.

The Cost of Disruption

Young children sometimes struggle with disruption, the underlying cost of moving, new schools, changes in routine, having to grow up too quickly, underperforming in schools or the inability to parent effectively as the parent can have far-reaching consequences for many years. Being financially comfortable can go a long way in maintaining the balance needed to endure a difficult period.

Childrens Cover

Albeit small, infant mortality in the UK is still present and can vary greatly by ethnicity. Serious illness claims for children and the challenges around waiting times for paediatric care are ever-present.

Term

There are your financial needs personally, and the financial needs of the family, and these run over different timeframes. Over time, and as your children become more independent, your family insurance needs are less. We will craft a personalised plan that ensures maximum cover when you are a young family but then the cover, and the cost of servicing it, falls over the years.

Parents and Children’s Needs and Wants

With any financial planning it is very important to categorise things you need, and things you want. This can create difficult conversations around choices of what you might cut back if you need to. There will likely be a difference in terms of how much is cut between parents and children and this can be built into the protection planning.

Grandparents Support

Does either parent have their parents around? that can, and are willing to help? do you want them to? How do you feel about asking them? and being reliant? It’s important to have those necessary conversations. Financial protection gives you the power to determine your plans and is flexible enough to accommodate other types of help and support you might be able to benefit from.

Intergenerational Planning

There is no such thing as a free lunch. The more insurance you have, the more it’s going to cost and sometimes these costs can be prohibitive.

Some providers offer a feature called ‘life of another’ that allows another member of a family, often a grandparent who is retired and comfortable financially, to service several policies for others. With cohesive trust planning this can be done with plenty of control and enables policies to start earlier when they are cheaper and carry on longer. Alongside a comprehensive intergenerational wealth plan, this can offer a rolling responsibility of payments. These payments can be paid for by the growth of family wealth investments owned by the retired to protect all of the family for generations to come.