Being a parent means always being there for your children, making sure that you provide them with everything they need. However, we all know that unfortunately life can throw us curveballs occasionally, often when we least expect it.
That’s why having life insurance protection in place is crucial to safeguard the financial future of your dependants; ensuring your nearest and dearest are protected if you were no longer around to provide.
Life insurance is a policy that pays out a cash lump sum to chosen loved ones after you are gone. The proceeds from a claim can help cover essentials such as:
Knowing that your children’s future is secure (98% of claims are paid) and that they will be taken care of can give you reassuring peace of mind.
Whether you’d like to leave your children an inheritance to enjoy, to fund potential university fees or even just to keep your family afloat when needed, securing life insurance can provide an essential safety blanket.
There are many types of life insurance policies, each better suited to meet different circumstances. But which policy option is best for you?
Check out the below guide by Reassured, an award-winning life insurance broker, to acquire a greater understanding of the top life insurance options for mums in 2024.
Level term life insurance
One of the most popular types of life insurance is level term cover (sometimes known as family life insurance). Cover is provided for a specfied period of time (the term) and will pay out if you were to pass away during this set term.
Level term life insurance provides:
Decreasing term life insurance
Similar to level term, decreasing term life insurance also provides cover for a set term determined during the application. However, in contrast to level term cover the pay out amount decreases over the lifetime of the policy. As the risk to the insurer diminishes with each passing month, decreasing term premiums are usually cheaper compared with level term cover.
This is an affordable way to cover specific finances, that will also give you the peace of mind that whatever happens, loved ones will be able to remain in the family home.
Whole of life
Whole of life insurance is a more expensive option, however, you will be covered for all your life (hence the name). Regardless of your children’s age, you may be able to help with funding their childhood or adulthood.
With this guaranteed pay out, your children will have the support at any stage in their lives. The pay out can contribute things like a funeral or even just for an inheritance.
Family income benefit
Slightly different from more traditional policies, family income benefit is an alternative to normal life insurance.
You still pay a monthly premium, but instead of a lump sum pay out, your loved ones will receive ongoing monthly income payments upon your passing for the duration of the policy term. For example, if you were to secure a 20 year policy with a £3000 a month cover amount and you pass away 8 years into the policy term, then your loved ones would receive tax-free monthly payments of £3000 for the remaining 12 years.
This is a popular option for new parents, or those with young children, as it’s an affordable way to help provide for the family if you were to pass away.
It is ideal for those who may find it difficult budgeting a large pay out sum and the regular payments can help them to obtain a comfortable family lifestyle.
Where to start…
Securing a policy can seem like a daunting task, but it really can be quite simple. As a mum, you may want to think about the following factors when deciding on the type of cover you require:
By browsing the internet you can conduct your own research, equally you could contact an FCA regulated broker (usually free of charge) or liaise directly with an insurer to explore your options.
Whichever method you choose, the most important thing is to compare quotes from different insurers as prices can vary significantly. Even a small saving each month over a 30 year policy term could add up to a significant sum.
What’s more your age at the point of application is one of the most influential factors in determining the premium cost. Therefore, if you have a family who rely on you, and you don’t currently have cover in place why not seize the day and avoid future premium inflation?
Guest blog by Reassured, an award-winning life insurance broker
